Talent Property Group Limited — Proxy Solicitation & Information Statement 2018

Feb 13, 2018

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Talent Property Group Limited (the “Company”), you should at once hand this circular to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

==> picture [56 x 39] intentionally omitted <==

TALENT PROPERTY GROUP LIMITED 新天地產集團有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 00760)

MAJOR TRANSACTION ACQUISITION OF LAND USE RIGHTS IN XUZHOU CITY, THE PRC

* For identification purposes only

14 February 2018

CONTENTS

		Page
DEFINITIONS	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
**LETTER FROM **	THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
APPENDIX I	– FINANCIAL INFORMATION OF THE GROUP . . . . . . .	I-1
APPENDIX II	– GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . .	II-1

– i –

DEFINITIONS

In this circular, unless the context otherwise requires, the following items shall have the meanings set out below:

• “Acquisition”

the acquisition of the land use rights of the Land Parcel through the Listing-for-Sale

• “Bid Confirmation”

• the online listing-for-sale successful bidding confirmation* (國有建設用地使用權網上交易競得通知 書) dated 19 December 2017 issued by the Xuzhou City Public Resources Exchange confirming the successful bid for the right to acquire the land use rights in respect of the Land Parcel at the Land Grant Price

• “Board”

• the board of Directors

• “Company”

• Talent Property Group Limited, a company incorporated in Bermuda with limited liability and listed on the Main Board of the Stock Exchange with a stock code of 760

• “Directors”

• directors of the Company

• “Group”

• the Company and its subsidiaries

• “Independent Third Party”

• an individual(s) or a company(ies) who or which is (are) independent of the Company and connected persons of the Company

• “Land Grant Price”

• RMB256.8 million, being the price for the acquisition of land use rights of the Land Parcel

• “Land Parcel”

• a parcel of land located to the south of Guozhuang Road (郭庒路), north of Longhai Railway (隴海鐵路), in Xuzhou City, Jiangsu Province, the PRC

• “Land Use Right Grant Contract”

• the contract for the grant of the land use right of state-owned construction land* (國有建設用地使用權出 讓合同) entered into between Xuzhou Shiyou and Xuzhou City Land Resources Bureau on 29 December 2017

• “Latest Practicable Date”

• 12 February 2018, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

– 1 –

DEFINITIONS

• “Listing-for-Sale” the online listing-for-sale bidding process held by the Xuzhou City Public Resources Exchange, which was commissioned by the Xuzhou City Land Resources Bureau, at which the Land Parcel was offered for sale

• “Listing Rules” The Rules Governing the Listing of Securities on the Stock Exchange

• “PRC” the People’s Republic of China, and for the purposes of this circular, excluding Hong Kong, Macau Special Administrative Region of the PRC and Taiwan

• “RMB” Renminbi, the lawful currency of the PRC

• “Shareholders” holders of shares in the capital of the Company

• “sqm” square metre

• “Stock Exchange” The Stock Exchange of Hong Kong Limited “subsidiary(ies)” has the meaning ascribed thereto under the Listing Rules

• “Transaction Confirmation” the acquisition confirmation* (國有建設用地使用權網上 交易成交確認書) entered into between the Xuzhou City Land Resources Bureau and Xuzhou Shiyou on 21 December 2017

“Xuzhou” Xuzhou City, Jiangsu Province, the PRC

• “Xuzhou City Land Resources Bureau”

• Xuzhou City Land Resources Bureau* (徐州市國土資源 局)

• “Xuzhou City Public Resources Xuzhou City Public Resources Exchange Centre* (徐州 Exchange” 市公共資源交易中心)

“Xuzhou Project” the construction and development of a large-scale intelligent logistics and commercial area in Xuzhou City, Jiangsu Province, the PRC

“Xuzhou Shiyou” Xuzhou Shiyou Logistics Development Co., Ltd.* (徐州 世郵物流發展有限公司), an indirectly non wholly-owned subsidiary held as to 51% by the Company, established in the PRC on 17 May 2017

“%”

per cent

• For identification purposes only

– 2 –

LETTER FROM THE BOARD

==> picture [56 x 39] intentionally omitted <==

TALENT PROPERTY GROUP LIMITED 新天地產集團有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 00760)

Executive Directors: Mr. Zhang Gao Bin Mr. Luo Zhangguan

Independent Non-executive Directors: Mr. Lo Wai Hung Mr. Chan Chi Mong, Hopkins Mr. Mak Yiu Tong

Registered office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Head office and principal place of business in Hong Kong: Unit A704, 3rd Floor, Tower A New Mandarin Plaza No. 14 Science Museum Road Tsim Sha Tsui East Kowloon, Hong Kong

14 February 2018

To the Shareholders

Dear Sir or Madam,

MAJOR TRANSACTION ACQUISITION OF LAND USE RIGHTS IN XUZHOU CITY, THE PRC

INTRODUCTION

Reference is made to the announcement of the Company dated 19 December 2017 in relation to the Acquisition. The purpose of this circular is to provide you with further details regarding the Acquisition.

ACQUISITION OF LAND USE RIGHTS

On 19 December 2017, Xuzhou Shiyou (an indirect non-wholly owned subsidiary of the Company) successfully bid for the land use rights to the Land Parcel through the Listing-for-Sale at the Land Grant Price.

– 3 –

LETTER FROM THE BOARD

Principal terms of the land use rights in relation to the Land Parcel

A summary of the principal terms of the Acquisition is set out below:

Date: 19 December 2017

Parties:

(1) Xuzhou City Land Resources Bureau; and (2) Xuzhou Shiyou

Surety paid in order to become a qualified bidder:

A sum of RMB266.8 million was deposited with the Xuzhou City Land Resources Bureau as surety for participating in the Listing-for-Sale for the Land Parcel, of which RMB10 million was the development commencement guarantee (開工竣 工履約保證金), which will form part of the payment of the Land Grant Price for the acquisition of the Land Parcel.

Land Grant Price:

RMB256.8 million

Land for transfer: the Land Parcel Term of grant: 40 years Site area of the Land Parcel: 101,904 sqm Permitted plot ratio: Between 1.4 to 2.0 Use of the Land Parcel: For commercial use

Other principal terms: Pursuant to the Bid Confirmation, Xuzhou Shiyou submitted qualification documents to the Xuzhou City Land Resources Bureau on 19 December 2017, which was within five business days after receipt of the Bid Confirmation, for verification. Upon completion of the verification process, Xuzhou Shiyou entered into the Transaction Confirmation on 21 December 2017. The Land Use Right Grant Contract in respect of the Land Parcel was entered into on 29 December 2017, which was within ten business days from the date of the Transaction Confirmation.

– 4 –

LETTER FROM THE BOARD

The transfer of the land use rights to the Land Parcel shall be completed within two months of full payment of the Land Grant Price.

Special conditions:

Pursuant to the notice of the Listing-for-Sale, the successful bidder for the Land Parcel shall (i) begin development of the Land Parcel within one year of the date of the Land Use Right Grant Contract and (ii) complete construction and development within three years year of the date of the Land Use Right Grant Contract.

The successful bidder shall be responsible for the construction of, among others, a logistics information exchange center and a commercial trade center, on the Land Parcel.

To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, each of the Xuzhou City Land Resources Bureau, Xuzhou City Public Resources Exchange and their ultimate beneficial owners is an Independent Third Party.

Land Grant Price

The Land Grant Price of RMB256.8 million, which was the bid price made by Xuzhou Shiyou in the Listing-for-Sale, was determined after having taken into account (i) the current property market conditions of Xuzhou City, Jiangsu Province, the PRC and (ii) the development potential of the Land Parcel. The Land Grant Price was satisfied by internal resources of the Group.

REASONS FOR AND BENEFITS OF THE ACQUISITION

The current total population in Xuzhou City is approximately 8.71 million. The Land Parcel, namely Sijiyayuan East Land Parcel (四季雅園東地塊), is located in Yunlong District to the south of Guozhuang Road (郭庒路), north of Longhai Railway* (隴海鐵路) in Xuzhou City, Jiangsu Province, the PRC.

The Acquisition will enable the Group to develop the Land Parcel for the Xuzhou Project. The Xuzhou Project is located in the new urban area on the eastern part of Xuzhou City, only a short distance from the core business district and the site of the district government offices. The geographic distance from the Land Parcel to Yunlong District government office is 2.3 km, to Yunlong District trade area-Wanda trade area is 2.8 km, to Xuzhou East Station is 4 km, to Xuzhou Railway Station is 6.7 km, and to Xuzhou Guanyin Airport is 34.5 km. Therefore, the Land Parcel is conveniently located.

– 5 –

LETTER FROM THE BOARD

The Land Parcel will be developed into eight separate zones together serving commercial, office and warehouse functions, with an aggregate area of approximately 160,000 sqm. It is planned that, among others, a logistics information exchange center, four office buildings, a commercial trade exhibition center, a vehicle service centre, an e-commerce distribution centre and a warehouse will be constructed on the Land Parcel. There are no competing logistics facilities around the Land Parcel: triangular in shape, the plot has two sides on street fronts and accordingly enjoys good display. It is close to a railway to its south, and to its east it adjoins the main trunk road which extends across the new and old urban areas, and therefore it is suitable for its planned use as a logistics area. In addition, the prime area of the new town in the Yunlong District of Xuzhou is located to the north of the plot. The area to the east of the plot is pending development. It is currently anticipated that (i) the pre-sale of commercial units with an aggregate area of 88,000 sqm under the Xuzhou Project will commence in the fourth quarter of 2018 at the earliest and (ii) development costs in 2018 will amount to approximately RMB363 million. The Directors believe that, once completed, the Xuzhou Project will promote the development of the whole region and facilitate the development of logistics industry in the incubation area.

The Directors believe that the Acquisition and the development of the Land Parcel through Xuzhou Shiyou will generate synergetic effect to the property development of the Group in such area, enable the Group to participate in and develop the growing logistics industry in China and be able to enhance its competitive edge in market competition. It will also increase the Group’s land reserve and geographical coverage, which is in line with the latest business strategy of the Group. The Directors are of the view that the terms of the Acquisition are fair and reasonable and in the interests of the Group and the Shareholders as a whole.

INFORMATION ON THE PARTIES

The Company is an investment holding company. Its subsidiaries are principally engaged in property development, investment and management in the PRC.

Xuzhou City Land Resources Bureau is a governmental body in the PRC responsible for, among other things, administrating the approval of land planning, assignment and transfer of land use rights to state-owned land in Xuzhou.

FINANCIAL EFFECTS OF THE ACQUISITION

Immediately upon completion of the Acquisition and assuming RMB256.8 million of the Land Grant Price is to be satisfied by the Group’s internal resources, the Group does not have any material change in assets, being a net effect from an increase of asset from land amounting to RMB256.8 million minus a decrease in cash and bank balances amounting to RMB256.8 million. The Company considers that there will not be any material effect on the earnings of the Group immediately upon completion of the Acquisition.

– 6 –

LETTER FROM THE BOARD

LISTING RULES IMPLICATIONS

Since one of the applicable percentage ratios for the Acquisition exceeds 25% but is less than 100%, the Acquisition constitutes a major transaction for the Company under Chapter 14 of the Listing Rules. The Acquisition is regarded as a “Qualified Property Acquisition” under Rule 14.04(10C) of the Listing Rules as the Acquisition involves an acquisition of governmental land in the PRC from a PRC Governmental Body (as defined under the Listing Rules) through a listing-for-sale governed by the PRC law (as defined under Rule 19A.04 of the Listing Rules). The Acquisition is subject to reporting, announcement and circular requirements but is exempt from Shareholders’ approval requirement pursuant to Rule 14.33A of the Listing Rules.

The Board confirms that the Acquisition is in the ordinary and usual course of business of the Group and on normal commercial terms which are fair and reasonable and in the interests of the Company and its Shareholders as a whole. Accordingly, the Acquisition is subject to reporting, announcement and circular requirements but is exempt from shareholders’ approval requirement pursuant to Rule 14.33A of the Listing Rules.

GENERAL

Your attention is also drawn to the financial information of the Group and general information set out in the appendices to this circular.

For and on behalf of the Board Talent Property Group Limited Zhang Gao Bin Chairman and Executive Director

* For identification purposes only

– 7 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. THREE YEARS FINANCIAL INFORMATION OF THE GROUP

The published audited consolidated financial statements of the Group for each of the three financial years ended 31 December 2014, 2015 and 2016 are disclosed in the Company’s annual reports for each of the three financial years ended 31 December 2014, 2015 and 2016, which have been published on the websites of the Stock Exchange (www.hkexnews.hk) and the Company (www.760hk.com).

2. STATEMENT OF INDEBTEDNESS

Borrowings

At the close of business on 31 December 2017, being the latest practicable date for the purpose of ascertaining the indebtedness of the Group prior to the printing of this circular, the Group had total outstanding indebtedness comprising secured and guaranteed bank loans of approximately RMB170 million, which were secured by the Group’s investment properties, other unsecured and unguaranteed borrowings and relevant accrued interest expenses of approximately RMB109.4 million, and unsecured an unguaranteed amount due to an associate of approximately RMB180.1 million.

Pledged assets

As at the close of business on 31 December 2017, the Group had pledged the Group’s investment properties with a carrying amount of RMB702 million to secure the bank borrowings of the Group.

Contingent liabilities

As at 31 December 2017, the Group provided guarantees to the extent of approximately RMB14.5 million to banks in respect of mortgage loans provided by the banks to customers for the purchase of the developed properties of the Group. These guarantees provided by the Group to the banks would be released upon receiving the building ownership certificates of the respective properties by the banks from the customers as a pledge for security to the mortgage loans granted.

Save as aforesaid, and apart from intra-group liabilities and normal trade payables in the ordinary course of business, the Group did not have any other debt securities issued and outstanding, or authorised or otherwise created but unissued, loans or any term loans (secured, unsecured, guaranteed or otherwise), any other borrowings or indebtedness in the nature of borrowing including bank overdrafts and any liabilities under acceptances (other than normal trade bills), acceptance credits or hire purchase commitments (guaranteed, unguaranteed, secured or otherwise), mortgages, charges or other material contingent liabilities, as at the close of business on 31 December 2017.

– I-1 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

3. WORKING CAPITAL

The Directors are of the opinion that, after taking into account the Acquisition, the internal resources available to the Group, external borrowings, presently available banking facilities and in the absence of unforeseen circumstances, the Group will have sufficient working capital for its present requirements for the next 12 months from the date of this circular.

4. RECENT DEVELOPMENTS AND FINANCIAL AND TRADING PROSPECT OF THE GROUP

The Group is currently engaged in the business of real estate development, property investment and property management in the PRC.

During the second half of 2017, the Group continued the delivery of high-rise residential units of its flagship project, Xintian Banshan, in Guangzhou, the PRC, to customers. The Group is currently preparing for the pre-sale of the luxury villas of Xintian Banshan, which is expected to be launched in the second quarter of the financial year ending 2018.

In addition to the capital funds which are expected to be returned to the Group from the sale and launch of residential units and villas of Xintian Banshan, the Group had made a new borrowing in the amount of RMB300 million for the development of Xintian Banshan. These resources are expected to be applied towards the Group’s logistics industry property development business in Yangzhou City, Jiangsu Province, the PRC, as well as the development of the Land Parcel. In addition, the Group is also actively seeking and evaluating any new opportunities of logistic projects with good potential.

The Directors are of the opinion that the Group’s financial position is sound, allowing it to readily capture potential investment opportunities which may arise in the future.

5. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2016, being the date to which the latest published audited consolidated financial statements of the Company were made up.

– I-2 –

GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF DIRECTORS’ INTERESTS

As at the Latest Practicable Date, the interest or short position of the directors and chief executives in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the Securities and Future Ordinance (the “ SFO ”)) which would have to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have under such provisions of SFO), or which were required to be and are recorded in the register required to be kept by the Company pursuant to Section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the “ Model Code ”), were as follows:

			Percentage of
			the Company’s
	Capacity/Nature of	Number of	issued share
Name	interest	underlying Shares	capital
Zhang Gao Bin	Personal	104,465,000	1.0%
	Interest in controlled	6,484,393,939	63.0%
	corporation
Mak Yiu Tong	Personal	150,000	0.0%

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executive of the Company:

• (i) was a director or employee of a company which had an interest or short position in the Shares and underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO; or

– II-1 –

GENERAL INFORMATION

APPENDIX II

• (ii) had any interest or short position in the Shares, underlying Shares and debentures of the Company or any of its associated corporation(s) (within the meaning of Part XV of the SFO), which were required (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they have taken or were deemed to have under such provisions of the SFO); (b) pursuant to Section 352 of the SFO, to be entered in the register of members of the Company; or (c) pursuant to the Model Code, to be notified to the Company and the Stock Exchange.

3. DISCLOSURE OF INTERESTS OF SUBSTANTIAL SHAREHOLDERS

As at the Latest Practicable Date, to the best knowledge of the Directors, the interests or short positions of substantial shareholders (other than Directors or the chief executives of the Company) in the shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of SFO or were recorded in the register required to be kept by the Company under Section 336 of SFO were as follows:

					Percentage of
					the Company’s
				Number of	issued share
Name				underlying Shares	capital
Talent	Trend	Holdings	Limited_(Note)_	6,484,393,939	63.0%

• Note: The entire issued share capital of Talent Trend Holdings Limited is directly, beneficially and wholly owned by Mr. Zhang Gao Bin.

Save as disclosed above, no persons, other than a director whose interests are set out above, had registered an interest or a short position in the shares and underlying shares or debentures of the Company that was required to be recorded under Section 336 of Part XV of the SFO.

4. INTERESTS IN ASSETS/CONTRACTS AND OTHER INTERESTS

• (i) none of the Directors has any direct or indirect interests in any assets which have been acquired or disposed of by or leased to, or which are proposed to be acquired or disposed of by or leased to, the Group since 31 December 2016, the date to which the latest published audited consolidated financial statements of the Group were made up; and

• (ii) there is no contract or arrangement entered into by any member of the Group subsisting at the Latest Practicable Date in which any Director is materially interested and which is significant to the business of the Group.

– II-2 –

GENERAL INFORMATION

APPENDIX II

5. COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors or their respective associates had any interest in any business which competes or is likely to compete, either directly or indirectly, with the business of the Group.

6. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors, proposed Directors had any existing or proposed service contracts with the Company, excluding contracts which are expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation).

7. MATERIAL CONTRACTS

Within the two years immediately preceding the date of this circular, the following material contracts (not being contracts entered into in the ordinary course of business) had been entered into by the members of the Group:

• (i) the Land Use Right Grant Contract;

• (ii) the land use right grant contract dated 18 January 2017 entered into between Yangzhou Shiyou Logistics Development Co., Ltd. (揚州世郵物流發展有限公司) and Yangzhou Land Resources Bureau (揚州市國土資源局), details of which are set out in the announcement of the Company dated 11 January 2017;

• (iii) the sale and purchase agreement dated 1 August 2016 and entered into between the Group and Gongqingcheng Anjian Investment Centre (Limited Partnership)* (共青 城安建投資中心(有限合夥)) in relation to the sale and purchase of the first to fourth floors of the commercial portion of Tianlun Garden of the Group, details of which are set out in the announcement of the Company dated 1 August 2016;

• (iv) the deed of amendment dated 20 October 2015 and entered into between the Company and Talent Trend Holdings Limited (“ Talent Trend ”) in relation to the extension of certain of the Company’s 2010 convertible notes, details of which are set out in the Group’s circular dated 12 May 2016;

• (v) the supplement deed of amendment dated 4 November 2015 and entered into between the Company and Talent Trend in relation to the extension of certain of the Company’s 2010 convertible notes, details of which are set out in the Group’s circular dated 12 May 2016; and

• (vi) the second supplemental deed of amendment dated 11 January 2016 and entered into between the Company and Talent Trend in relation to the amendment of the Company’s 2010 convertible notes, details of which are set out in the Group’s circular dated 12 May 2016.

– II-3 –

GENERAL INFORMATION

APPENDIX II

8. LITIGATION

As at the Latest Practicable Date, none of the members of the Group was engaged in any litigation or claims of material importance and no litigation or claims of material importance were pending or threatened against any member of the Group.

9. GENERAL

• (i) The company secretary of the Company is Mr. Lee Wai Kuen, who is a fellow member of the Association of Chartered Certified Accountants and a Certified Public Accountant (Practising) of the Hong Kong Institute of Certified Public Accountants.

• (ii) The registered address of the Company is Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda.

• (iii) The Company’s head office and principal place of business in Hong Kong is Unit A704, 3rd Floor, Tower A, New Mandarin Plaza, No. 14 Science Museum Road, Tsim Sha Tsui East, Hong Kong.

• (iv) The branch share registrar and transfer office of the Company is Computershare Hong Kong Investor Services Limited, Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong.

• (v) The English text of this circular shall prevail over the Chinese text in case of any inconsistency.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours at our office of Unit A704, 3rd Floor, Tower A, New Mandarin Plaza, No. 14 Science Museum Road, Tsim Sha Tsui East, Hong Kong from the date of this circular up to and including a date which in any event is not less than 14 days from the date of this circular:

• (i) the memorandum of association and bye-laws of the Company;

• (ii) the Land Use Right Grant Contract;

• (iii) other material contracts referred to in the paragraph headed “Material Contracts” in this appendix;

• (iv) the annual reports of the Company for each of the two years ended 31 December 2016;

• (v) this circular.

• For identification purposes only

– II-4 –