Tsun Yip Holdings Limited — M&A Activity 2016

Jul 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.

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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CNC HOLDINGS LIMITED 中國新華電視控股有限公司

(incorporated in the Cayman Islands with limited liability)

(stock code: 8356)

VERY SUBSTANTIAL ACQUISITION AND CONNECTED TRANSACTION IN RELATION TO THE PROPOSED ACQUISITION OF 100% INTEREST IN SHENZHEN CC PARK

Reference is made to the Company's announcements dated 3 June 2016 and 27 June 2016 in relation to the very substantial acquisition of the Company (" VSA Announcements "). Unless otherwise defined, terms used in this announcement shall have the same meanings as those defined in the VSA Announcements.

On 19 July 2016, the Purchaser and the Vendors entered into a further amended and restated share purchase agreement (" Further Restated SPA ") to amend and restate the Agreement, pursuant to which the terms be changed as follows:

1. CONSIDERATION

The Consideration remains at HK$600,000,000 but it will be settled in the following manner:

• (i) the issue of an unsecured three-year term promissory note in the principal amount of HK$160,000,000 (" Promissory Note ") by the Purchaser to the Vendors upon Completion;

• (ii) the issue and allotment of 1,900,000,000 Consideration Shares (" New Consideration Shares ") by the Company to the Vendors upon Completion; and

• (iii) HK$60,000,000 (subject to adjustment, if any) (" Profit Guarantee Retained Consideration ") will be payable by the Purchaser to the Vendors after Completion and after and subject to the determination of the 2016 Net Profit pursuant to the terms of the Further Restated SPA. Please see the paragraph below headed "Adjustments to the Consideration and Profit Guarantee" for further details in relation to the Profit Guarantee Retained Consideration.

Adjustments to the Consideration and Profit Guarantee

Pursuant to the Further Restated SPA, the Purchaser has an absolute discretion to adjust the portion of the New Consideration Shares if, as a result of the issue and allotment of the New Consideration Shares to the Vendors, (i) the Vendors and their concert parties may own 30% or more of the voting rights of the Company; (ii) a mandatory general offer under the Takeovers Code in respect of the Shares will be triggered on the part of the Vendors and

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their concert parties; or (iii) the transactions contemplated under the Further Restated SPA will be regarded as a reverse takeover of the Company under the GEM Listing Rules.

The Vendors irrevocably guarantee to the Purchaser that each of the 2016 Net Profit, 2017 Net Profit and 2018 Net Profit shall not be less than RMB50,000,000 (in each case, except for reason due to occurrence of force majeure events (such as natural disaster, war etc.), the acceptance of such exception to the sole discretion of the Purchaser), and agree to indemnify the Purchaser jointly and severally of any 2016 Net Profit Shortfall, 2017 Net Profit Shortfall and 2018 Net Profit Shortfall. According to the Further Restated SPA, for the purpose of the profit guarantee under the 2016 Net Profit, the Profit Guarantee Retained Consideration (i.e. HK$60,000,000 (subject to adjustment, if any)) will not be paid to the Vendors upon Completion pending determination of whether the 2016 Net Profit will be met. Upon the occurrence of a 2016 Net Profit Shortfall, the Purchaser may reduce the portion or the whole of the Profit Guarantee Retained Consideration.

2. CONDITIONS PRECEDENT TO COMPLETION

Pursuant to the Further Restated SPA, the Completion is subject to the following conditions:

• (a) due diligence investigation on, among other things, the value, business, operations, assets, liabilities, financial status and prospects of Target Group having been completed by the Purchaser and the results of such due diligence investigation being satisfactory to the Purchaser (including but not limited to any loan, guarantee, pledge or other similar obligations provided by any member of the Target Group to any nonmember of the Target Group having been duly discharged to the satisfaction of the Purchaser);

• (b) the representations and warranties given by the Vendors remaining true and accurate in all respects and not misleading at Completion;

• (c) the Purchaser and the Company having obtained sufficient funding for the cash portion of the Consideration;

• (d) the consummation of the transactions contemplated under the Further Restated SPA does not (i) trigger a mandatory general offer obligation under the Takeovers Code on the part of the Vendors and their concert parties; (ii) constitute a reverse takeover of the Company under the GEM Listing Rules; or (iii) result in the Vendors (either individually or together) becoming the single largest Shareholder;

• (e) all consents, permits, authorisations, authorities and formal approvals (as the case may be) that each of the Purchaser and each of the Vendors considers reasonable pursuant to applicable laws, regulations or rules for the execution, implementation and Completion of the Further Restated SPA (including but not limited to the approval from the Shareholders as required under the GEM Listing Rules and the Stock Exchange's approval and clearance for (i) the allotment and issue of the New Consideration Shares and the listing thereof on the GEM, and (ii) the appointment of the person jointly nominated by the Vendors as an executive Director) having been obtained; and

• (f) all such consents, permits, authorisations, authorities and formal approvals as referred to above not having been revoked or withdrawn at any time up to Completion.

The Purchaser may waive all or any of the above conditions precedent (other than (a) (to the extent that any loan, guarantee, pledge or other similar obligations provided by any member of the Target Group to any non-member of the Target Group not having been discharged to the satisfaction of the Purchaser), (d), (e) and (f)) by notice to the Vendors on or before 31 December 2016. As at the date of this announcement, the Purchaser has no intention to waive any of such conditions precedent. As at the date of this announcement, none of the conditions precedent to Completion has been fulfilled.

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If all of the conditions are not fulfilled or otherwise waived (as the case may be) on or before 31 December 2016, the Purchaser has the right to terminate the Further Restated SPA and all obligations of the parties under the Further Restated SPA shall end but all rights and liabilities of the parties which have accrued before termination shall continue to exist.

Save for the above revisions, all the terms and conditions under the Agreement remain unchanged.

SHAREHOLDING STRUCTURE OF THE COMPANY

Assuming there will be no adjustment to the number of New Consideration Shares and no other factors affecting the shareholding structure of the Company, set out below is the shareholding structure of the Company (i) as at the date of this announcement, and (ii) immediately upon Completion:

China Xinhua News NetworkMr Chia Kar Hin, Eric John (an executiveDirector)Mr Kan Kwok Cheung (an executive Director)PublicVendors	As at the date of thisannouncementUpon Completion (Note)Number ofShares%Number ofShares%1,188,621,37729.31%2,004,947,90729.61%14,600,0000.36%14,600,0000.21%69,000,0001.70%69,000,0001.02%2,783,128,57068.63%2,783,128,57041.10%----1,900,000,00028.06%
	4,055,349,947100.00%6,771,676,477100.00%

Note: This is on the basis that part of the outstanding Convertible Bonds held by China Xinhua News Network will be converted into a total of 816,326,530 new Shares simultaneously upon Completion. China Xinhua News Network has notified the Company of its intention to convert part of its outstanding Convertible Bonds into a total of 816,326,530 new Shares simultaneously upon Completion, so that China Xinhua News Network will remain as the single largest Shareholder immediately upon issue and allotment of the New Consideration Shares at Completion.

Shareholders and potential investors should note that the Completion is subject to the fulfilment of the conditions precedent and should exercise caution when dealing in the Shares.

By order of the Board CNC Holdings Limited Li Yuet Tai Company Secretary

Hong Kong, 20 July 2016

As at the date of this announcement, the Directors are Mr. Zhang Hao[1] (Chairman), Mr. Zou Chen Dong[1] (Vice Chairman and Chief Executive Officer), Mr. Kan Kwok Cheung[1] , Mr. Chia Kar Hin, Eric John[1] , Dr. Li Yong Sheng[2] , The Hon. Ip Kwok Him, GBS, JP[3] , Mr. Wan Chi Keung, Aaron, BBS, JP[3] , Mr. Jin Hai Tao[3] and Mr. Wong Chung Yip, Kenneth[3] .

1 Executive Director

2 Non-executive Director

3 Independent non-executive Director

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This announcement, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM 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 announcement 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 announcement misleading.

This announcement will remain on the GEM website at http://www.hkgem.com on the “Latest Company Announcements” page for at least seven days from the date of its posting and the Company’s website at www.cnctv.hk.

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