Television Broadcasts Limited — Capital/Financing Update 2015

Feb 10, 2015

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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China Fortune Financial Group Limited

(Incorporated in the Cayman Islands with limited liability)

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

ISSUE OF CONVERTIBLE BONDS UNDER GENERAL MANDATE

On 10 February 2015 after trading hours, the Company and the Subscriber entered into the Subscription Agreement in respect of the issue of the Convertible Bonds in the principal amount of HK$40,384,615 due twelve calendar months from the date of issue of the Convertible Bonds at a conversion price of HK$0.13 per Conversion Share. Completion of the Subscription Agreement is subject to the conditions set out in the paragraph headed ‘‘Conditions Precedent’’ below. Detailed terms of the Convertible Bonds are set out in the paragraph headed ‘‘Principal Terms and Conditions of the Convertible Bonds’’ below. The net proceeds from the issue of the Convertible Bonds of approximately HK$40 million will be used for repayment of debts and/or as general working capital of the Group. Upon full conversion of the Convertible Bonds at the Conversion Price, a total of 310,650,884 Conversion Shares will be issued, representing approximately 9.09% of the issued share capital of the Company as at the date of this announcement and approximately 8.33% of the issued share capital of the Company as enlarged by the issue of the Conversion Shares.

Completion of the Subscription is subject to fulfilment of the conditions precedent under the Subscription Agreement. Accordingly, the Subscription may or may not proceed. Shareholders and potential investors are reminded to exercise caution when dealing in the Shares.

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On 10 February 2015 after trading hours, the Company and the Subscriber entered into the Subscription Agreement in respect of the issue of the Convertible Bonds in the principal amount of HK$40,384,615 due twelve months from the date of issue of the Convertible Bonds at a conversion price of HK$0.13 per Conversion Share. Details of the Subscription Agreement and the terms of the Convertible Bonds are set out below.

SUBSCRIPTION AGREEMENT

1) Parties and Date

Date: 10 February 2015 Issuer: the Company Subscriber: the Subscriber

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, each of the Subscriber and its ultimate beneficial owner(s) is not a connected person of the Company under the Listing Rules. The Subscriber is a company incorporated in the British Virgin Islands and is principally engaged in investment holdings. It is a wholly-owned subsidiary of Credit China Holdings Limited, the shares of which are listed on the Growth Enterprise Market of the Stock Exchange.

• 2) Principal Terms and Conditions of the Convertible Bonds

Issuer: the Company Holder: the Subscriber Principal Amount: HK$40,384,615 Issue Price: 100% at the full face value of the Convertible Bonds Status: the Convertible Bonds constitute direct and unconditional unsubordinated and unsecured obligations of the Company and shall at all times rank pari passu and without any preference among themselves. The payment obligations of the Company under the Convertible Bonds shall, save for such exceptions as may be provided by applicable legislation, at all times rank at least equally with all its other present and future unsecured and unsubordinated obligations. Form and Denomination: the Convertible Bonds will be issued in registered form in a single denomination of HK$40,384,615. The certificate will be issued to the Subscriber in respect of its registered holding of the Convertible Bonds. Interest: 12% per annum on the outstanding principal amount of the Convertible Bonds

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Interest Period:

the period of twelve (12) calendar months commencing on the date of issue of the Convertible Bonds and ending on the maturity date of the Convertible Bonds

Maturity Date:

Conversion Price:

the date that is twelve (12) calendar months after the date of issue of the Convertible Bonds

HK$0.13 per Conversion Share, subject to adjustments under certain circumstances including but not limited to capitalisation issue, share consolidation, share subdivision, capital distribution and rights issue.

The initial Conversion Price of HK$0.13 per Conversion Share was determined after arm’s length negotiations between the Company and the Subscriber with reference to the prevailing market price of the Shares, and represents:

• (1) a discount of approximately 5.80% to HK$0.1380 per Share, being the closing price as quoted on the Stock Exchange on 10 February 2015 (‘‘Last Trading Day’’);

• (2) a discount of approximately 7.14% to HK$0.1400 per Share, being the average of the closing prices as quoted on the Stock Exchange for the last five consecutive trading days up to and including the Last Trading Day; and

• (3) a discount of approximately 3.85% to HK$0.1352 per Share, being the average of the closing prices as quoted on the Stock Exchange for the last ten consecutive trading days up to and including the Last Trading Day.

Conversion Rights:

Conversion Shares:

Holder of the Convertible Bonds will have the right, upon maturity of the Convertible Bonds, to convert the Convertible Bonds in whole or in part of the outstanding principal amount of the Convertible Bonds into Conversion Shares

310,650,884 Conversion Shares would be in issue on full conversion of the Convertible Bonds, subject to adjustments to the Conversion Price

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Redemption:

The Company shall be entitled to redeem the Convertible Bonds by repaying the Subscriber the then outstanding principal amount and accrued interests of the Convertible Bonds during the period commencing on the date of issue of the Convertible Bonds and ending on the date of maturity of the Convertible Bonds provided that (a) the Company has served a written redemption notice to the Subscriber; and (b) such written notice has been duly delivered by the Company to the Subscriber at least ten (10) Business Days in advance before the date of actual redemption

Redemption Amount:

• Unless previously redeemed, the Company shall redeem the Convertible Bonds by repaying the Subscriber all outstanding principal amount and accrued interests of the Convertible Bonds on the date of maturity of the Convertible Bonds

Transferability:

The Convertible Bonds shall not be transferred or assigned by the Subscriber without the prior written consent of the Company

• Ranking of Conversion Shares:

The Conversion Shares issued upon conversion of the Convertible Bonds will in all respects rank pari passu with the Shares already in issue on the conversion date

Listing:

No application will be made by the Company for the listing of the Convertible Bonds on the Stock Exchange. An application will be made by the Company to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Conversion Shares that may be issued upon the conversion of the Convertible Bonds

3) Conditions Precedent

Completion of the Subscription Agreement is conditional upon the fulfilment of the following conditions precedent:

• (a) each of the warranties given by the Company under the Subscription Agreement remaining true and accurate in all material respects up to Completion;

• (b) the performance and observance by the Company of all the undertakings and covenants on the part of the Company contained in the Subscription Agreement; and

• (c) the Stock Exchange shall have granted the listing of and permission to deal in the Conversion Shares.

The Subscriber shall have the discretion to waive all or any part of the conditions set out above except condition (c) and any waiver so granted may be subject to such conditions as the Subscriber may deem fit.

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If the conditions set out above shall not have been fulfilled or waived by 5: 00 p.m. (Hong Kong time) on the day falling 90 days of the date of the Subscription Agreement (or such later date as the parties may agree in writing), the Subscription Agreement shall automatically terminate and none of the parties to the Subscription Agreement shall have any claim of any nature or liabilities thereunder whatsoever against any of the other parties under the Subscription Agreement (save for any antecedent breaches).

4) Completion

Completion shall take place in Hong Kong on the day immediately after which the conditions precedent set out in the Subscription Agreement are fulfilled and/or waived.

REASONS FOR THE ISSUE OF CONVERTIBLE BONDS AND USE OF PROCEEDS

The net proceeds from the issue of Convertible Bonds of approximately HK$40 million will be used for repayment of debts and/or as general working capital of the Group.

The Directors consider that the raising of funds by the issue of Convertible Bonds is justifiable taking into account the recent market conditions which represent an opportunity for the Group to strengthen its capital base and financial position. The Directors consider that the issue of Convertible Bonds is an appropriate means of raising additional capital of the Company since it will not have an immediate dilution effect on the shareholding of the existing Shareholders.

The Conversion Price was agreed upon based on the recent closing prices of the Shares as quoted on the Stock Exchange. The Directors (including the independent non-executive Directors) consider that the terms of the Subscription Agreement, which were arrived at after arm’s length negotiations between the Company and the Subscriber, are fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

EXISTING CONVERTIBLE BONDS

Reference is made to the announcement of the Company dated 6 February 2013 in relation to, among other matters, the issue of convertible bonds in the principal amount of HK$32,000,000 by the Company to One Express Group Limited (‘‘One Express Convertible Bonds’’). As at the date of this announcement, there were outstanding One Express Convertible Bonds in the principal amount of HK$32,000,000 which upon full exercise of the conversion rights attaching to the One Express Convertible Bonds pursuant to the terms thereof, the Company may have to issue up to 320,000,000 new Shares, representing approximately 9.36% of the issued share capital of the Company as at the date of this announcement.

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SHAREHOLDING STRUCTURE

For illustrative purpose only, set out below is the shareholding structure of the Company (a) as at the date of this announcement; and (b) immediately upon full conversion of the Convertible Bonds at the Conversion Price (without adjustment), assuming there being no other change in the issued share capital and shareholding structure of the Company since the date of this announcement and no exercise of the conversion rights attaching to the One Express Convertible Bonds:

Shareholders Jadehero Limited (Note 1) Mankind Investment Limited (‘‘MIL’’) (Note 2) Right Magic Limited (Note 3) SO Chi Yuk Other public shareholders The Subscriber	As at the date of this announcement Number of shares (approx. % of shareholding) 800,000,000 23.40% 500,000,000 14.63% 263,738,000 7.72% 200,000,000 5.85% 1,654,647,668 48.40% — — 3,418,385,668 100.00%	Upon full conversion of the Convertible Bonds Number of shares (approx. % of shareholding) 800,000,000 21.45% 500,000,000 13.41% 263,738,000 7.07% 200,000,000 5.36% 1,654,647,668 44.38% 310,650,884 8.33% 3,729,036,552 100.00%	Upon full conversion of the Convertible Bonds Number of shares (approx. % of shareholding) 800,000,000 21.45% 500,000,000 13.41% 263,738,000 7.07% 200,000,000 5.36% 1,654,647,668 44.38% 310,650,884 8.33% 3,729,036,552 100.00%
			100.00%

Notes:

1. Mr. WONG Kam Fat Tony (‘‘Mr. Wong’’) is the chairman of the Company and the executive Director whereas Mr. XIA Yingyan (‘‘Mr. Xia’’) is the 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.

3. Right Magic Limited, Sure Venture Investment Limited, Excel Return Enterprise Limited and Fameway Finance Limited beneficially held 263,738,000 Shares, 20,000,000 Shares, 7,000,000 Shares and 140,000,000 Shares, respectively. Right Magic Limited, Sure Venture Investment Limited, Excel Return Enterprise Limited and Fameway Finance Limited are all indirect wholly-owned subsidiaries of Chinese Strategic Holdings Limited. For the purpose of the SFO, Chinese Strategic Holdings Limited is deemed or taken to be interested in the Shares held by Right Magic Limited, Sure Venture Investment Limited, Excel Return Enterprise Limited and Fameway Finance Limited.

FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

During the 12 months immediately preceding the date of this announcement, the Company raised an aggregate amount of HK$48,000,000 through the issue of corporate bonds to independent private investors.

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LISTING RULES IMPLICATIONS

The Conversion Shares will be allotted and issued under the General Mandate. As at the date of this announcement, no part of the General Mandate has been utilised. The issue of the Conversion Shares is not subject to any approval by the Shareholders.

No application will be made for the listing of, or permission to deal in, the Convertible Bonds on the Stock Exchange or any other stock exchange. Application will be made by the Company to the Stock Exchange for the listing of, and permission to deal in, the Conversion Shares.

Completion of the Subscription is subject to fulfilment of the conditions precedent under the Subscription Agreement. Accordingly, the Subscription may or may not proceed. Shareholders and potential investors are reminded to exercise caution when dealing in the Shares.

DEFINITIONS

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

• ‘‘Board’’ the board of Directors ‘‘Business Day’’ 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’’ completion of the Subscription Agreement in accordance with its terms and conditions

• ‘‘connected person’’ has the meaning ascribed thereto in the Listing Rules ‘‘Conversion Price’’ HK$0.13 per Share (subject to adjustments) ‘‘Conversion Shares’’ the Shares which may fall to be allotted and issued upon exercise of the conversion rights attaching to the Convertible Bonds

• ‘‘Convertible Bonds’’ the 12% coupon convertible bonds in the principal amount of HK$40,384,615 due twelve (12) months from the date of issue to be issued by the Company to the Subscriber pursuant to the Subscription Agreement

• ‘‘Directors’’ the directors of the Company ‘‘General Mandate’’ the general mandate granted to the Directors pursuant to an ordinary resolution passed at the annual general meeting of the Company held on 25 August 2014 to allot, issue and deal with up to 683,677,133 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

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‘‘Hong Kong’’	The Hong Kong Special Administrative Region of the People’s	The Hong Kong Special Administrative Region of the People’s	The Hong Kong Special Administrative Region of the People’s
	Republic of China
‘‘Last Trading Day’’	10 February 2015, being the date of this announcement
‘‘Listing Rules’’	the Rules Governing the Listing of Securities on The Stock Exchange
	of Hong Kong Limited
‘‘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$0.10 each in the capital of the Company
‘‘Shareholder(s)’’	holder(s) of the Shares
‘‘Stock Exchange’’	The Stock Exchange of Hong Kong Limited
‘‘Subscriber’’	Ever Step Holdings Limited, a company incorporated in the	British
	Virgin Islands with limited liability and a wholly-owned subsidiary of
	Credit China Holdings Limited, a company whose shares are listed		on
	the Growth Enterprise Market of the Stock Exchange
‘‘Subscription’’	the subscription of the Convertible Bonds by the Subscriber pursuant
	to the terms of the Subscription Agreement
‘‘Subscription	the subscription agreement dated 10 February 2015 and entered into
Agreement’’	between the Company and the Subscriber in relation	to	the
	subscription and issue of the Convertible Bonds
‘‘HK$’’	Hong Kong dollars, the lawful currency of Hong Kong
‘‘%’’	per cent.
	By Order of the Board
	China Fortune Financial Group	Limited
	NG Cheuk Fan Keith
	Managing Director

Hong Kong, 10 February 2015

As at the date of this announcement, the Board consists of four executive Directors, namely Mr. WONG Kam Fat Tony (Chairman), Mr. NG Cheuk Fan Keith (Managing Director), Mr. HON Chun Yu and Mr. XIA Yingyan; one non-executive Director, namely Mr. WU Ling; and three independent non-executive Directors, namely Mr. CHAN Kin Sang, Mr. NG Kay Kwok and Mr. TAM B Ray Billy.

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