Synagistics Limited — Capital/Financing Update 2016

Jun 20, 2016

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.

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OP FINANCIAL INVESTMENTS LIMITED 東英金融投資有限公司[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 1140)

CONNECTED TRANSACTION SUBSCRIPTION OF A PROMISSORY NOTE

THE SUBSCRIPTION

On 20 June 2016 (after trading hours), the Company entered into the Subscription Agreement with FCSSC pursuant to which the Company has agreed to subscribe for the Note in the principal amount of HK$9,500,000. The Subscription will be completed on Completion Date (i.e. 22 June 2016) and FCSSC will on such date issue the Note to the Company.

LISTING RULES IMPLICATIONS

FCSSC is owned as to 50% by Mr. Zhang and 50% by Mr. Cai Esheng. Mr. Zhang is the chairman of the Board and an executive Director of the Company and Mr. Cai Esheng is independent of and not connected with the Company and its connected persons. Hence, FCSSC is an associate of Mr. Zhang and a connected person of the Company under the Listing Rules and the Subscription constitutes a connected transaction for the Company. Given all the applicable percentage ratios (other than the profits ratio) of the connected transaction is less than 25% and the total consideration is less than HK$10,000,000 calculated with reference to Rule 14.07 of the Listing Rules, the Subscription will be exempted from circular and shareholders’ approval requirement under Chapter 14A of the Listing Rules.

On 20 June 2016 (after trading hours), the Company entered into the Subscription Agreement with FCSSC pursuant to which the Company has agreed to subscribe for the Note in the principal amount of HK$9,500,000. The Subscription will be completed on Completion Date (i.e. 22 June 2016) and FCSSC will on such date issue the Note to the Company.

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Details of the Subscription Agreement and the Note are set out below.

THE SUBSCRIPTION AGREEMENT

Date: 20 June 2016

Parties:

• (1) The Company, being the subscriber of the Note

• (2) FCSSC, being the issuer of the Note. FCSSC is an associate of Mr. Zhang. Hence, FCSSC is a connected person of the Company under the Listing Rules.

The Subscription

Pursuant to the Subscription Agreement, the Company has agreed to subscribe for the Note in the principal amount of HK$9,500,000 in cash for a total consideration of HK$9,500,000, which shall be payable by the Company to FCSSC upon Completion Date. The consideration was determined based on arm’s length negotiations between the Company and FCSSC with reference to the reasons for and benefits of the Subscription as set out below.

Completion

Completion shall take place on Completion Date, being 22 June 2016. The Company will, on Completion Date, pay to FCSSC the principal amount of HK$9,500,000 for the Note in cash and FCSSC will on the same date issue the Note to the Company.

THE NOTE

The terms of the Note have been negotiated on an arm’s length basis and the principal terms of which are summarised below:

Date of issue	:	22 June 2016
Issuer	:	FCSSC
Principal amount	:	HK$9,500,000
Interest	:	The Note shall carry interest at the rate of 5% per annum,
		calculated on a 12-month year basis on the outstanding
		principal amount, payable in HK$ annually on 22 June in
		each year in arrears and upon maturity or early redemption (as
		the case may be) of the Note.
Transferability of the	:	The Note may be transferred in whole or in part by the
Note		Noteholder(s) to any Person.
Maturity date	:	Third anniversary of the date of issue of the Note.

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Early redemption

• : FCSSC may redeem the Note in whole at the outstanding principal amount of the Note prior to maturity date, plus all accrued and unpaid interest for such redemption, provided that notice for such redemption is given to the Noteholder(s) not less than 15 days in advance.

Upon occurrence of an event of default set out in the conditions of the Note, including, among others, failure to pay when due any principal or interest payment on the due date as specified in the Note, failure to observe or perform any other covenant, obligation, condition or agreement contained in the Transaction Documents, and voluntary or involuntary bankruptcy or insolvency of FCSSC, unless waived by Majority Noteholder(s), Noteholders(s) shall have the option to require FCSSC to redeem part or all of the Note at the principal amount of the Note to be redeemed plus all accrued and unpaid interest, on the date set by the Noteholder(s) for such redemption, which shall not be less than 30 days nor more than 60 days following the event of default or the date on which the Noteholder(s) becomes aware of such event (if later).

Upon occurrence of a Change of Control, the Noteholders(s) shall have option to require FCSSC to redeem part or all of the Note at the principal amount of the Note to be redeemed plus all accrued and unpaid interest, on the date set by the Noteholder(s) for such redemption, which shall not be less than 30 days nor more than 60 days following the Change of Control or the date on which the Noteholder(s) becomes aware of such event (if later).

REASONS FOR AND BENEFITS OF THE SUBSCRIPTION

The Company is an investment company under Chapter 21 of the Listing Rules, with the mandate allowing the Group to invest globally in various assets, equity, debts, financial instruments, investment funds and partnerships, investment structures, businesses and special situations. The Group aims to produce medium to long term shareholder returns through capital appreciation, dividend and fixed income.

FCSSC is a non-governmental, non-profit international organization founded in Hong Kong in April 2014. It is an integral platform which specializes in providing experience, knowledge, productivity and financing supports for South-South Cooperation and aims to promote pragmatic cooperation and partnerships between governments of developing countries, private enterprises, multilateral development institutions and international development assistance organizations. FCSSC is a comprehensive and innovative platform established under the 2030 Agenda for Sustainable Development goals of the United Nations. In this regard, FCSSC has strong network and rich experience in the areas of sustainable and inclusive investment and development.

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The Subscription is effected to promote cooperation between the Group and FCSSC so as to allow the Group to benefit from the experience and connection of FCSSC so as to explore into the cooperation or investment opportunities in the nations of the global South, in particular, Indonesia, Thailand, Vietnam and India. Furthermore, the Subscription will also benefit the Group due to the following reasons:

• (a) FCSSC has formed solid and positive basis of cooperation with nations of the global South, international financial institutions, multilateral development agencies and Chinese companies with strong incentive and capabilities to expand their businesses worldwide. Besides, FCSSC is in the process of building an electronic platform in cooperation with agencies of the United Nations, which serves as an information hub of demand and supply of the Southern countries as well as resources, solutions and financing related to sustainable economic development. In this regard, the close relationship with the platform will greatly benefit the Group and facilitate the implementation of the Group’s strategic objectives along the One Belt and One Road regions, as well as promote investment in the area. In this regard, FCSSC is in a favorable position to facilitate and promote overseas investments and expansions undertook by the Group. The Group may also leverage off FCSSC’s network to gain access to good business and investment opportunities;

• (b) FCSSC has initiated the establishment of a South-South social impact fund in cooperation with the United Nations Social Impact Fund, aimed at encouraging and facilitating financially viable investments which are able to bring positive impacts on sustainable development. In this regard, FCSSC could assist the Group to expand its investment scope into social impact investing, meanwhile the fund is a suitable channel for the Company to serve its corporate social responsibility in a more sustainable and influential manner;

• (c) FCSSC has reached agreements with various parties to jointly build special economic zones and industrial parks in nations of the global South. In this regard, these ventures create tremendous opportunities for international capacity cooperation and stimulate overseas investments which are aligned with the commercial interest of the Group; and

• (d) FCSSC has established close cooperation relationship with leading research institutions and think tanks in the PRC and other parts of the world. In this regard, supporting the operation of the FCSSC and building a strong tie with it gives the Group the opportunity to utilize the research resources and the network of FCSSC further to pursue commercial interests, when deemed to be appropriate.

Based on the above, the Directors believe that the Subscription will strengthen the relationship between the Group and FCSSC, and the Group through FCSSC may expand its investment into other parts of the world.

The Directors are of the view that the Subscription is in line with the business expansion strategy of the Group. The Directors (including the independent non-executive Directors) are of the view that the respective terms of the Subscription Agreement, the Note and the transaction contemplated thereunder are on normal commercial terms or better and in the ordinary and usual course of business of the Group, fair and reasonable and in the interests of the Company and the Shareholders as a whole.

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LISTING RULES IMPLICATIONS

FCSSC is owned as to 50% by Mr. Zhang and 50% by Mr. Cai Esheng. Mr. Zhang is the chairman of the Board and an executive Director of the Company and Mr. Cai Esheng is independent of and not connected with the Company and its connected persons. Hence, FCSSC is an associate of Mr. Zhang and a connected person of the Company under the Listing Rules and the Subscription constitutes a connected transaction for the Company. Given all the applicable percentage ratios (other than the profits ratio) of the connected transaction is less than 25% and the total consideration is less than HK$10,000,000 calculated with reference to Rule 14.07 of the Listing Rules, the Subscription will be exempted from circular and shareholders’ approval requirement under Chapter 14A of the Listing Rules. By virtue of Mr. Zhang’s interest in FCSSC, he has abstained from voting on the Board resolution to approve the Subscription and the transactions contemplated under the Subscription Agreement.

As none of the applicable percentage ratios (as set out in Rule 14.07 of the Listing Rules) in respect of the Subscription exceeds 5%, the Subscription does not constitute a notifiable transaction for the Company under Chapter 14 of the Listing Rules.

DEFINITIONS

In this announcement, the following expressions have the meanings set out below unless the context requires otherwise:

“associate(s)” have the same meanings ascribed thereto under the Listing Rules “Board” the board of Directors “Change of Control” occurs when (i) any person or persons (as defined in this definition) acting together acquires Control of FCSSC if such person or persons does not or do not have, and would not be deemed to have, Control of FCSSC on the date of issue of the Note; (ii) FCSSC consolidates with or merges into or sells or transfers all or substantially all of its assets to any other person, unless the consolidation, merger, sale or transfer will not result in the other person or persons acquiring Control over FCSSC or the successor entity; or (iii) one or more other persons acting together becomes all or substantially all of the members of FCSSC; provided that, for purposes of this definition, a “person” does not include the Board or any other governing board of FCSSC and does not include the FCSSC’s affiliates (if any)

“Company” OP Financial Investments Limited, a company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on the Main Board of the Stock Exchange

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“Completion” the completion of the Subscription and the issue of the Note in accordance with the terms and conditions of the Subscription Agreement “Completion Date” the date of Completion, being 22 June 2016, or such other date as may be agreed between the Company and FCSSC in writing

• “connected person(s)” has the meaning ascribed thereto in the Listing Rules

“Control” in respect an entity, means (i) control of more than 50% of the voting rights of the issued share capital of such entity; or (ii) the right to appoint and/or remove all or the majority of the members of the board, whether obtained directly or indirectly, and whether obtained by ownership of share capital, the possession of voting rights, contract or otherwise

“Directors” directors of the Company “FCSSC” Finance Center for South-South Cooperation Limited (南 南合作金融中心有限公司), a company limited by guarantee incorporated in the Hong Kong on 14 May 2014 and a connected person of the Company

“Group” the Company and its subsidiaries “Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of Hong Kong

“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange “Majority Noteholder(s)” means Noteholder(s) with more than two-thirds of the outstanding principal balance of the Note

“Mr. Zhang” Mr. Zhang Zhi Ping, the chairman of the Board and an executive Director

“Note” the promissory note in the principal amount of HK$9,500,000 to be issued by FCSSC for subscription by the Company pursuant to the terms and conditions of the Subscription Agreement “Noteholder(s)” the holder(s) of the Note

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“Person” means and includes an individual, a partnership, a corporation (including a business trust), a joint stock company, a limited liability company, an unincorporated association, a joint venture or other entity or a governmental authority

“PRC” the People’s Republic of China “Share(s)” ordinary share(s) with nominal value of HK$0.10 each in the share capital of the Company “Shareholder(s)” the shareholder(s) of the Company “South-South Cooperation” a framework for collaboration among nations of the global South in the political, economic, social, cultural, environmental, and technical domains that can take place on a bilateral, regional, sub-regional, or inter-regional basis, involving developing countries that share knowledge, skills, expertise and resources to meet their development goals

“Stock Exchange”

The Stock Exchange of Hong Kong Limited

• “Subscription”

• the subscription of the Note by the Company pursuant to the terms and conditions of the Subscription Agreement

• “Subscription Agreement” the agreement dated 20 June 2016 and entered into between the Company and FCSSC in respect of the Subscription

• “Transaction Documents”

• “HK$”

• means the Note, the Subscription Agreement and all other documents and instruments executed in connection therewith Hong Kong dollars, the lawful currency of Hong Kong

“%” per cent.

By order of the Board of OP Financial Investments Limited Zhang Gaobo Executive Director & CEO

Hong Kong, 20 June 2016

As at the date of this announcement, the Board comprises two executive Directors, namely, Mr. Zhang Zhi Ping and Mr. Zhang Gaobo; one non-executive Director, namely Dr. Liu Zhiwei and three independent non-executive Directors, namely, Mr. Kwong Che Keung, Gordon, Professor He Jia and Mr. Wang Xiaojun.

• For identification purpose only

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