Television Broadcasts Limited — Capital/Financing Update 2013

Jul 18, 2013

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

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China Fortune Financial Group Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 290) Website: http://www.290.com.hk

PLACING OF NEW SHARES UNDER GENERAL MANDATE

Placing Agent

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THE PLACING

On 18 July 2013 (after trading hours), the Placing Agent and the Company entered into the Placing Agreement pursuant to which the Company has conditionally agreed to place, through the Placing Agent on a best effort basis, a maximum of 300,000,000 Placing Shares to not fewer than six Placees who and whose ultimate beneficial owners will be third parties independent of and are not connected with the Company and its associates.

A maximum of 300,000,000 Placing Shares, representing approximately 9.48% of the existing issued share capital of the Company of 3,166,085,668 Shares as at the date of this announcement and approximately 8.66% of the then issued share capital of 3,466,085,668 Shares as enlarged by the Placing, will be placed pursuant to the Placing Agreement. The Placing Price of HK$0.10 per Placing Share represents: (i) a premium of approximately 33.33% over the closing price of HK$0.075 per Share as quoted on the Stock Exchange on 18 July 2013, being the date of this announcement; (ii) a premium of approximately 33.33% over the average closing price of approximately HK$0.075 per Share as quoted on the Stock Exchange for the five consecutive trading days immediately prior to the date of this announcement; and (iii) a premium of approximately 33.33% over the average closing price of approximately HK$0.075 per Share as quoted on the Stock Exchange for the ten consecutive trading days immediately prior to the date of this announcement.

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The Placing is conditional upon, among other things, the Listing Committee of the Stock Exchange granting or agreeing to grant the listing of, and permission to deal in, the Placing Shares. The maximum gross proceeds from the Placing will be HK$30,000,000. The maximum net proceeds from the Placing (after deduction of the relevant expenses and costs) will amount to approximately HK$29,400,000 which is intended to be used for repayment of debts and as the general working capital of the Group. The maximum net proceeds raised upon completion of the Placing will be approximately HK$0.10 per Placing Share. The Placing is not subject to Shareholders’ approval as the Placing Shares will be issued under the General Mandate.

Shareholders and potential investors should note that completion of the Placing is subject to fulfillment of the conditions under the Placing Agreement. As the Placing may or may not proceed, Shareholders and potential investors are reminded to exercise caution when dealing in the Shares.

THE PLACING AGREEMENT

Date

18 July 2013 (after trading hours)

Issuer

The Company

Placing Agent

The Placing Agent has conditionally agreed to place a maximum of 300,000,000 Placing Shares on a best effort basis within the Placing Period. The Placing Agent will receive a placing commission of 1.5% on the gross proceeds of the actual number of Placing Shares being placed.

The Placing Agent is a wholly-owned subsidiary of the Company. As at the date of this announcement, the Placing Agent does not hold any Shares.

Placees

The Placing Shares will be placed to not fewer than six Placees who and whose ultimate beneficial owners will be independent third parties and not connected with the Company and its associates. It is expected that none of the Placees will become a substantial Shareholder immediately after completion of the Placing.

Number of Placing Shares

Pursuant to the Placing Agreement, a maximum of 300,000,000 Placing Shares will be placed by the Placing Agent to independent Placees on a best effort basis, representing approximately 9.48% of the existing issued share capital of the Company of 3,166,085,668 Shares as at the date of this announcement and approximately 8.66% of the then issued share capital of 3,466,085,668 Shares as enlarged by the Placing. The maximum aggregate nominal value of the Placing Shares under the Placing will be HK$30,000,000.

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Ranking of Placing Shares

The Placing Shares will rank, upon issue, pari passu in all respects among themselves and with the Shares in issue and all rights attaching to them on and after the date of allotment including all dividends declared or payable or other distributions made or proposed to be made on such Shares with reference to a record date occurring on or after the date of allotment of the Placing Shares.

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.

Placing Price

The Placing Price of HK$0.10 per Placing Shares represents: (i) a premium of approximately 33.33% over the closing price of HK$0.075 per Share as quoted on the Stock Exchange on 18 July 2013, being the date of this announcement; and (ii) a premium of approximately 33.33% over the average closing price of approximately HK$0.075 per Share as quoted on the Stock Exchange for the five consecutive trading days immediately prior to the date of this announcement; and (iii) a premium of approximately 33.33% over the average closing price of approximately HK$0.075 per Share as quoted on the Stock Exchange for the ten consecutive trading days immediately prior to the date of this announcement.

Issue of the Placing Shares under the General Mandate

As disclosed in the announcement of the Company dated 6 February 2013, the Company entered into a subscription agreement with One Express Group Limited in relation to the subscription of convertible bond in the principal amount of HK$32,000,000 by One Express Group Limited with the conversion rights to convert into 320,000,000 Shares at the initial conversion price of HK$0.10 (subject to adjustment) (‘‘One Express Convertible Bond’’). The Shares upon conversion under the One Express Convertible Bond will be issued and allotted under the General Mandate. As at the date of this announcement, no conversion rights of the One Express Convertible Bond have been exercised.

Save for the Shares to be issued upon conversion under the One Express Convertible Bond, there was no other exercise of the General Mandate up to the date of this announcement and the Company is entitled to issue and allot additional 313,217,133 new Shares under the General Mandate. As the Placing Shares will be issued under the General Mandate, the Placing is not subject to the approval of the Shareholders.

Conditions of the Placing Agreement

Completion of the Placing Agreement is conditional upon:

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

• (b) the obligations of the Placing Agent under the Placing Agreement not being terminated in accordance with the terms of the Placing Agreement.

If the conditions precedent to the Placing Agreement are not fulfilled prior to the expiry of the Placing Period or such later date as may be agreed between the Company and the Placing Agent in writing, the Placing Agreement will lapse and become null and void save the liabilities for any antecedent breaches.

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Termination

The Placing Agreement may be terminated by the Placing Agent if at any time prior to 9: 00 a.m. on the Completion Date:

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

• (i) any new law or regulation or any change in existing laws or regulations or the interpretation thereof which in the opinion of the Placing Agent, acting reasonably, may materially and adversely affect the business or financial condition or prospects of the Group as a whole;

• (ii) any local, regional, national or international event or change (whether or not permanent or forming part of a series of events or changes occurring or continuing, on and/or after the date hereof) of a political, military, financial, economic, currency (including a change in the system under which the value of the Hong Kong currency is linked to the currency of the United States of America) or other nature (whether or not ejusdem generis with the foregoing), which may or may be expected to, in the opinion of the Placing Agent, acting reasonably, adversely affect the business or financial or trading position or prospects of the Group as a whole or prejudices the success of the Placing of the Shares or otherwise makes it inexpedient or inadvisable for the Company or the Placing Agent to proceed with the Placing; or

• (iii) any significant change (whether or not permanent) in local, regional, national or international market conditions (including without limitation suspension or material restriction on trading in securities or any conditions affecting a sector of the market) which may reasonably or may be reasonably expected to adversely affect the success of the Placing or otherwise in the opinion of the Placing Agent, acting reasonably, makes it inexpedient or inadvisable or inappropriate for the Company or the Placing Agent to proceed with the Placing;

• (b) the Company commits any material breach of or any material omission to observe any of the obligations or undertakings expressed or assumed under the Placing Agreement;

• (c) trading of the Shares on the Stock Exchange has been suspended for more than ten consecutive trading days save for the purposes of clearing of any announcements or circulars relating to the Placing; or

• (d) any breach of any of the representations or warranties contained in the Placing Agreement which in the opinion of the Placing Agent, acting reasonably, is material in the context of the Placing, comes to the knowledge of the Placing Agent or there has been a breach by the Company of any other provision of the Placing Agreement which in the opinion of the Placing Agent, acting reasonably, is material in the context of the Placing;

then and in any such case, the Placing Agent may, acting reasonably, terminate the Placing Agreement without liability to the Company or any other party by giving notice in writing to the Company, which notice may be given at any time prior to the Completion Date.

In the event that the Placing Agreement is terminated pursuant to the paragraphs above, all obligations of each of the parties under the Placing Agreement shall cease and determine and no party shall have any claim against any other party in respect of any matter arising out of or in connection with the Placing Agreement except for any antecedent breaches.

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The Directors are not aware of the occurrence of any of such events as at the date of this announcement.

Completion of the Placing

Completion of the Placing will take place within four Business Days immediately after the fulfillment of the conditions set out in the paragraph headed ‘‘Conditions of the Placing Agreement’’ above or such later date as may be agreed by and between the Company and the Placing Agent in writing.

Shareholders and potential investors should note that completion of the Placing is subject to fulfillment of the conditions under the Placing Agreement. As the Placing may or may not proceed, Shareholders and potential investors are advised to exercise caution when dealing in the Shares.

REASONS FOR THE PLACING AND USE OF PROCEEDS

The Group’s principal activities are securities and insurance brokerage, margin financing, provision of corporate finance services and money lending services.

The maximum gross proceeds from the Placing will be HK$30,000,000. The maximum net proceeds from the Placing (after deduction of the relevant expenses and costs) will amount to approximately HK$29,400,000 which is intended to be used for repayment of debts and as general working capital of the Group. The maximum net proceeds raised upon completion of the Placing will be approximately HK$0.10 per Placing Share.

The terms of the Placing Agreement (including the Placing Price and the commission to be received by the Placing Agent) were determined after arm’s-length negotiation between the Company and the Placing Agent with reference to the prevailing market price of the Shares and the terms of similar transactions in the market. The Directors consider that the terms of the Placing are fair and reasonable based on the current market conditions and in the interests of the Company and the Shareholders as a whole.

The Directors are of the view that the Placing will broaden the Shareholders’ portfolio and strengthen the financial position of the Group. Accordingly, the Board considers that the Placing is in the interests of the Company and the Shareholders as a whole.

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FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

Save as disclosed below, the Company has not conducted any other fund raising activities in the past twelve months immediately prior to the date of this announcement.

Date of Intended use of announcement Event Net proceeds proceeds Actual use of proceeds 6 February 2013 The Company entered into a HK$32,000,000 Repayment of Utilised as intended subscription agreement with debts and/or as One Express Group Limited the general in relation to issue of the One working capital Express Convertible Bond of the Group.

EFFECTS ON SHAREHOLDING STRUCTURE

For illustrative purpose only, set out below is the shareholding structure of the Company (i) as at the date of this announcement; and (ii) immediately upon completion of the Placing assuming that all the Placing Shares have been successfully placed and there is no other change in the issued share capital of the Company and no exercise of the conversion rights attaching to any outstanding convertible securities of the Company:

Jadehero Limited (Note 1) Mankind Investment Limited (‘‘MIL’’) (Note 2) Public Shareholders Placees Other public Shareholders Total	As at the date of this announcement Number of Shares approx. % 800,000,000 25.27 500,000,000 15.79 — — 1,866,085,668 58.94 3,166,085,668 100.00	Upon Completion of the Placing Number of Shares approx. % 800,000,000 23.08 500,000,000 14.42 300,000,000 8.66 1,866,085,668 53.84 3,466,085,668 100.00	Upon Completion of the Placing Number of Shares approx. % 800,000,000 23.08 500,000,000 14.42 300,000,000 8.66 1,866,085,668 53.84 3,466,085,668 100.00
			100.00

Notes:

1. Mr. Wong Kam Fat Tony (‘‘Mr. Wong’’) is the vice-chairman and a non-executive Director whereas Mr. Xia Yingyan (‘‘Mr. Xia’’) is an executive Director. Jadehero Limited (‘‘Jadehero’’), a company incorporated in the British Virgin Islands with limited liability, beneficially held 800,000,000 Shares. Jadehero is owned as to 20% by Marvel Steed Limited and as to 80% by Southlead Limited. Mr. Wong is the sole beneficial owner of the entire equity interest in Marvel Steed Limited whereas Mr. Xia is the sole beneficial owner of the entire equity interest in Southlead Limited.

2. MIL beneficially held 500,000,000 Shares. MIL is wholly-owned by China Cinda (HK) Asset Management Co., Limited (‘‘China Cinda (HK)’’) which is in turn wholly-owned by Well Kent International Investment Company Limited (‘‘Well Kent’’). Well Kent is wholly-owned by China Cinda Asset Management Co. Ltd. For the purpose of the SFO, China Cinda (HK), Well Kent and China Cinda Asset Management Co. Ltd. are deemed or taken to be interested in the Shares held by MIL.

POTENTIAL EFFECT ON THE PROPOSED GRANT OF MANDATES TO ISSUE AND REPURCHASE SHARES AT THE AGM

Reference is made to the circular of the Company dated 27 June 2013 regarding, among other matters, the proposed grant of a general mandate for issue of new Shares (‘‘Proposed General Mandate’’) and a repurchase mandate for repurchase of Shares (‘‘Proposed Repurchase Mandate’’) by the Shareholders at the AGM (‘‘Circular’’).

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The Proposed General Mandate and the Proposed Repurchase Mandate are subject to the limit not exceeding 20% of the aggregate nominal amount of the issued share capital of the Company as at the date of the AGM and the limit not exceeding 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of the AGM, respectively.

As disclosed in the Circular, the Company had an aggregate of 3,166,085,668 Shares in issue as at 21 June 2013. Subject to passing of the resolutions for approval of the Proposed General Mandate and the Proposed Repurchase Mandate and on the basis that no further Shares are issued or repurchased between 21 June 2013 and the date of the AGM, the Company would be allowed under the Proposed General Mandate to allot, issue and deal with a maximum of 633,217,133 Shares and under the Proposed Repurchase Mandate to repurchase a maximum of 316,608,566 Shares, respectively.

Assuming that all the Placing Shares have been successfully placed and issued under the Placing before the date of the AGM and there is no other change in the issued share capital of the Company since the date of this announcement up to the date of the AGM, the Company will have an aggregate of 3,466,085,668 Shares in issue. Subject to passing of the resolutions for approval of the Proposed General Mandate and the Proposed Repurchase Mandate, the Company will be allowed under the Proposed General Mandate to allot, issue and deal with a maximum of 693,217,133 Shares and under the Proposed Repurchase Mandate to repurchase a maximum of 346,608,566 Shares, respectively.

DEFINITIONS

Terms or expressions used in this announcement shall, unless the context otherwise requires, have the meanings ascribed to them below:

‘‘AGM’’	the annual general meeting of the Company to be held on 2 August
	2013;
‘‘Board’’	the board of Directors;
‘‘Business Day(s)’’	a day (except Saturday, Sunday or public holiday) on which banks in
	Hong Kong are generally open for business;
‘‘Company’’	China Fortune Financial Group Limited, a company incorporated in
	the Cayman Islands with limited liability and the Shares of which are
	listed on the Stock Exchange;
‘‘Completion Date’’	the date of completion of the Placing;
‘‘Directors’’	the directors of the Company;
‘‘General Mandate’’	the general mandate granted to the Directors pursuant to the ordinary
	resolutions passed at the annual general meeting of the Company held
	on 15 August 2012 to allot, issue and deal with up to 633,217,133 new
	Shares, representing 20% of the aggregate nominal amount of the
	issued share capital of the Company on the date of such annual
	general meeting;
‘‘Group’’	the Company and its subsidiaries;
‘‘HK$’’	Hong Kong dollars, the lawful currency of Hong Kong;

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• ‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the People’s Republic of China;

• ‘‘Listing Rules’’ the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited;

• ‘‘Placee(s)’’ any professional, institutional or other investor(s) procured by the Placing Agent to purchase any of the Placing Shares pursuant to the Placing Agent’s obligations under the Placing Agreement;

• ‘‘Placing’’ the private placing of the Placing Shares, on a best effort basis, to the Placees procured by the Placing Agent on the terms and conditions set out in the Placing Agreement;

• ‘‘Placing Agent’’ Fortune (HK) Securities Limited, a corporation licensed to carry out type 1 (dealing in securities) regulated activities under the SFO and a wholly-owned subsidiary of the Company;

• ‘‘Placing Agreement’’ the conditional placing agreement dated 18 July 2013 entered into between the Company and the Placing Agent in relation to the Placing;

• ‘‘Placing Period’’ the period commencing on the date of execution of the Placing Agreement and ending at 5: 00 p.m. on 31 August 2013, unless terminated earlier in writing pursuant to the terms of the Placing Agreement or such other period as agreed between the parties to the Placing Agreement in writing;

• ‘‘Placing Price’’ HK$0.10 per Placing Share; ‘‘Placing Share(s)’’ a maximum of 300,000,000 new Shares to be issued pursuant to the General Mandate and to be placed pursuant to the terms of the Placing Agreement;

• ‘‘SFC’’ The Securities and Futures Commission of Hong Kong;

• ‘‘SFO’’ the Securities and Futures Ordinance (Chapter 571, laws of Hong Kong);

• ‘‘Share(s)’’ ordinary share(s) of HK$0.10 each in the capital of the Company; ‘‘Shareholder(s)’’ holder(s) of the Shares; ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited; and ‘‘%’’ per cent.

By Order of the Board China Fortune Financial Group Limited Ng Cheuk Fan Keith Managing Director

Hong Kong, 18 July 2013

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As at the date of this announcement, the Board consists of four executive Directors, namely Mr. Zhang Min (Chairman), Mr. Ng Cheuk Fan Keith (Managing Director), Mr. Hon Chun Yu and Mr. Xia Yingyan; two non-executive Directors, namely Mr. Wong Kam Fat Tony (Vicechairman) and Mr. Wu Ling; and three independent non-executive Directors, namely Mr. Lam Ka Wai Graham, Mr. Ng Kay Kwok and Mr. Tam B Ray Billy.

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