Space Group Holdings Limited — Capital/Financing Update 2021

Apr 7, 2021

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company.

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Space Group Holdings Limited 恆宇集團控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 2448)

SUPPLEMENTAL AGREEMENT IN RELATION TO PLACING OF NEW SHARES UNDER GENERAL MANDATE

Placing Agent

Reference is made to the announcement (the “ Announcement ”) of Space Group Holdings Limited (the “ Company ”) dated 17 March 2021 in relation to the Company’s entering into a Placing Agreement with the Space Securities Limited (the “ Placing Agent ”) in respect of the Placing.

Unless otherwise specified, capitalised terms used in this announcement shall have the same meanings as set out in the Announcement.

THE SUPPLEMENTAL AGREEMENT

On 7 April 2021, the Company and the Placing Agent entered into a supplemental agreement in relation to the Placing (the “ Supplemental Agreement ”) to revise certain terms in the Placing Agreement relating to completion of the Placing.

Pursuant to the Supplemental Agreement, the Placing Price was revised from HK$2.3 per Placing Share to HK$2.35 per Placing Share. The Placing Price of HK$2.35 per Placing Share represents: (i) a discount of 6.00% to the closing price of HK$2.5 per Share as quoted on the Stock Exchange on 7 April 2021, being the date of the Supplemental Agreement; and

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(ii) a discount of approximately 5.09% to the average closing price of HK$2.476 per Share as quoted on the Stock Exchange for the last five trading days immediately preceding and including the date of the Supplemental Agreement. The revised Placing Price was arrived at after arm’s length negotiations between the Company and the Placing Agent with reference to the recent market price of the Shares. The Directors consider that the Placing Price is fair and reasonable, on normal commercial terms and are in the interests of the Company and the Shareholders as a whole.

Pursuant to the Supplemental Agreement, the Placing shares was revised from 60,000,000 shares to 46,000,000 shares. Assuming that there will be no change in the issued share capital of the Company between the date of this announcement and the completion of the Placing, the 46,000,000 Placing Shares represent 6.05% of the Company’s existing issued share capital and approximately 5.71% of the Company’s issued share capital as enlarged by the allotment and issue of the Placing Shares. The aggregate nominal value of the Placing Shares under the Placing will be HK$460,000.

Pursuant to the Supplemental Agreement, the Long Stop Date was revised from 30 April 2021 to 28 April 2021.

Save and except for the above amendment, all terms and conditions contained in the Placing Agreement remain unchanged and in full force and effect.

Placing

Pursuant to the Placing Agreement and subject to the provisions contained therein, the Company appoints the Placing Agent to the exclusion of others, and the Placing Agent, relying on the representations, warranties and undertakings contained therein, agrees as agent for the Company during the Placing Period to procure the Placees on a best effort basis to subscribe for up to 46,000,000 Placing Shares at the Placing Price of HK$2.35 per Placing Share. Placing Agent will receive a placing commission of 1.5% on the gross proceeds of the Placing upon completion of the Placing. The commission rate is determined with reference to the prevailing placing commission rate charged by Space Securities to Independent Third Parties which are companies listed on the Stock Exchange for best-effort placing of shares with fund-raising size similar to the Placing. Given the maximum gross proceeds of the Placing of HK$108,100,000, the maximum placing commission that the Placing Agent could receive from the Placing amounts to HK$1,621,500. The Directors are of the view that the placing commission accords with the market rate and is fair and reasonable. In view that the placing commission rate charged by Space Securities under the Placing Agreement is in line with its prevailing rates charged to Independent Third Parties for comparable best-effort placing, the directors of the Company consider that the placing commission received by Space Securities under the Placing is fair and reasonable and in the interest of the shareholders of the Company.

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Placees

The Placing Agent will place the Placing Shares to not less than six independent Placees, being professional, institutional or other investors, who and whose ultimate beneficial owners are third parties independent of, not acting in concert (as defined in the Takeovers Code) with and not connected with the Company and its connected persons. It is expected that none of the Placees will become substantial Shareholder (as defined in the Listing Rules) immediately after completion of the Placing.

Ranking of Placing Shares

The Placing Shares, when issued and fully paid, will rank pari passu in all respects among themselves and with the Shares in issue on the date of allotment and issue of the Placing Shares.

General Mandate

The Placing Shares will be allotted and issued under the General Mandate granted to the Directors by a resolution of the Shareholders passed at the Company’s annual general meeting held on 24 June 2020 pursuant to which the Directors are allowed to allot and issue up to 152,000,000 new Shares. The maximum of 46,000,000 Placing Shares to be allotted and issued will utilize 30.3% of the General Mandate.

As at the date of this announcement, no new Shares have been issued and allotted pursuant to the General Mandate. Accordingly, the issue of the Placing Shares is not subject to the approval of the Shareholders.

Conditions of the Placing

Completion of the Placing is conditional upon:

• (i) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Placing Shares; and

• (ii) the transactions contemplated by the Placing Agreement not being prohibited by law or regulation or interpretation thereof (including without limitation, any statue, order, rule, regulation, request, judgement or directive promulgated or issued by any legislative, executive, judicial or regulatory body or authority) in Hong Kong or other jurisdiction which is applicable to the Company or the Placing Agent.

If the conditions are not fulfilled on or prior to the Long Stop Date, the Placing Agreement shall terminate and none of the parties shall have any claim against the other for costs, damages, compensation or otherwise save for any antecedent breach of the Placing Agreement.

Application will be made by the Company to the Listing Committee of the Stock Exchange for the grant of the listing of, and permission to deal in, the Placing Shares.

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Termination of the Placing

The Placing Agent may terminate the Placing Agreement without any liability to the Company, by notice in writing to the Company at any time prior to the Completion Date upon the occurrence of any of the following events which, in the absolute opinion of the Placing Agent, has or may have a material adverse effect on the business or financial conditions, affairs or prospects of the Company or the Group taken as a whole or the success of the Placing or otherwise makes it inappropriate, inadvisable or inexpedient to proceed with the Placing on the terms and in the manner contemplated in the Placing Agreement:

• (A) there develops, occurs or comes into force:

  • (i) the occurrence of any event, development or change (whether or not local, national or international or forming part of a series of events, developments or changes occurring or continuing before, on and/or after the date of the Placing Agreement) and including an event or change in relation to or a development of an existing state of affairs of a political, military, industrial, financial, economic, fiscal, regulatory or other nature, resulting in a material change in, or which may result in a material change in, political, economic, fiscal, financial, regulatory or stock market conditions; or

  • (ii) the imposition of any moratorium, suspension or material restriction on trading in securities generally on the Stock Exchange occurring due to exceptional financial circumstances or otherwise; or

  • (iii) any material change in conditions of local, national or international securities markets occurs; or

  • (iv) any new law or regulation or change in existing laws or regulations or any change in the interpretation or application thereof by any court or other competent authority in Hong Kong or any other jurisdiction relevant to the Group; or

  • (v) a change or development occurs involving a prospective change of taxation or exchange control (or the implementation of exchange control) in Hong Kong, or elsewhere; or

  • (vi) any litigation or claim being instigated against the Company or any member of the Group; or

• (B) any material breach of any of the representations, warranties and undertakings by the Company set out in the Placing Agreement or any event occurs or any matter arises on or after the date of the Placing Agreement and prior to the Completion Date which if it had occurred or arisen before the date of the Placing Agreement would have rendered any of such representations and warranties untrue or incorrect in any material respect or there has been a material breach by the Company of any other provision of the Placing Agreement; or

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• (C) there is any adverse change in the financial position of the Company which is material in the context of the Placing;

then and in any such case, the Placing Agent may terminate the Placing Agreement without liability to the Company by giving notice in writing to the Company provided that such notice is received prior to the Long Stop Date.

Upon the giving of the above mentioned notice by the Placing Agent to the Company, all obligations of each of the parties under the Placing Agreement shall cease and determine and no party shall have any claim against the other party in respect of any matter arising out of or in connection with the Placing Agreement except for any antecedent breach of any obligation under the Placing Agreement; and outstanding liabilities under the terms of the Placing Agreement.

Completion of the Placing

Completion of the Placing shall take place on the Completion Date.

As completion of the Placing is subject to the satisfaction of the conditions under the Placing Agreement, the Placing may or may not proceed. Shareholders and the public are reminded to exercise caution when dealing in the Shares.

REASONS FOR THE PLACING AND USE OF PROCEEDS

The principal activities of the Group are (i) fitting-out works; (ii) building construction works; and (iii) the provision of financial services, including securities trading, underwriting, providing investment advice, and asset management. The Directors are of the view that the Placing represents a good opportunity for the Group to raise additional capital for its future expansion and business development.

The gross proceeds from the Placing will be HK$108.1 million. The Company intends to use the net proceeds of approximately HK$106.5 million from the Placing as general working capital and for future expansion of the Group.

The Directors are of the view that the Placing will enlarge the shareholder base and the capital base of the Company. In addition, the net proceeds of the Placing will strengthen the Group’s financial position for future development of the Group. Accordingly, they consider that the Placing is in the interests of the Company and the Shareholders as a whole.

On the other hand, it is in the ordinary course of business of Space Securities to carry out placing activities as a placing agent for companies listed on the Stock Exchange. In addition, the placing commission rate charged by Space Securities under the Placing Agreement is in line with the prevailing rates that it has charged to Independent Third Parties for comparable best-effort placing. In view of the aforesaid, the directors of the Company (including the independent non-executive directors) consider that the entering into of the Placing Agreement

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by Space Securities with the Company is in the ordinary and usual course of business of Space Securities, and the terms of the Placing Agreement (including the placing commission rate) are on normal commercial terms, fair and reasonable and in the interests of the Company and its shareholders as a whole.

FUND RAISING ACTIVITIES DURING THE PAST 12 MONTHS

There was no fund-raising activity conducted by the Company in the past 12 months prior to the date of this announcement.

CHANGE IN THE SHAREHOLDING STRUCTURE OF THE COMPANY

Set out below is the shareholdings in the Company as at the date of this announcement and immediately after completion of the Placing, on the assumption that 46,000,000 Placing Shares are fully placed and there is no other change to the issued share capital of the Company prior to the completion of the Placing:

ShareholdersSpace Investment (BVI) LtdLoi Ka HouThe PlaceesPublic Shareholder	As at the date ofthis announcementNo. of SharesApproximate %541,500,00071.2566,665,0008.77––151,835,00019.98760,000,000100.00	Upon completion of the Placing(assuming that all ofthe Placing Shares are placed in full)No. of SharesApproximate %541,500,00067.1866,665,0008.2746,000,0005.71151,835,00018.84806,000,000100.00	Upon completion of the Placing(assuming that all ofthe Placing Shares are placed in full)No. of SharesApproximate %541,500,00067.1866,665,0008.2746,000,0005.71151,835,00018.84806,000,000100.00
			100.00

INFORMATION ON THE COMPANY

The Company is a limited liability company incorporated in the Cayman Islands whose shares are listed on the Main Board of the Stock Exchange. The principal activities of the Group are (i) fitting-out works; (ii) building construction works; and (iii) the provision of financial services, including securities trading, underwriting, providing investment advice, and asset management.

The Group entered into agreement on 30 September 2020 to acquire the entire issued share capital of the Placing Agent. Completion of the acquisition shall take place when, among others, the necessary approval(s) from the Securities and Futures Commission being obtained.

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GENERAL

The Directors of the Company (including its respective independent non-executive directors) are of the view that the Placing Agreement and the transactions contemplated thereunder (including the payment of any placing commission) have been entered into on normal commercial terms that are fair and reasonable, in the ordinary and usual course of business of the Company, and in the interests of the Company and its respective shareholders as a whole.

By order of the Board Space Group Holdings Limited Che Chan U Chairman

Hong Kong, 7 April 2021

As at the date of this announcement, the Board comprises Mr. Che Chan U, Ms. Lei Soi Kun and Mr. Ho Kwong Yu as executive Directors; and Mr. Fan Chun Wah, Andrew, Mr. Eulógio dos Remédios, José António and Ms. Leong Iat Lun as independent non-executive Directors.

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