Uni-Bio Science Group Limited - M&A Activity 2018

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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UNI-BIO SCIENCE GROUP LIMITED 聯康生物科技集團有限公司[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 0690)

DISCLOSEABLE AND CONNECTED TRANSACTIONS – TRANSACTION ARRANGEMENTS

Financial Adviser to the Purchasers

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

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The Board is pleased to announce that after trading hours on 16 November 2018, certain members of the Group entered into the Transaction Arrangements which include:

(1) Vendor A, an indirect wholly-owned subsidiary of the Company, and Purchaser A entered into the Figures Up SP Agreement pursuant to which Vendor A has conditionally agreed to sell, and Purchaser A has conditionally agreed to purchase, the Figures Up Sale Shares at the Figures Up Consideration of RMB40,000,000 (equivalent to HK$45,024,000). The Figures Up Sale Shares represent all the issued shares of Figures Up, an indirect wholly-owned subsidiary of the Company as at the date of this announcement, which, together with its subsidiaries, is mainly the research and development platform of the Group located in Dongguan; and

* For identification purposes only

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(2) Vendor B, a wholly-owned subsidiary of Vendor A, and Purchaser B entered into the WTGL SP Agreement pursuant to which Vendor B has conditionally agreed to sell and Purchaser B has conditionally agreed to purchase, (i) the WTGL Land and Property Rights and (ii) the WTGL Sale Shares at the WTGL Consideration of RMB60,000,000 (equivalent to HK$67,536,000). The WTGL Land and Property Rights represent all the economic rights relating to the land use rights of the WTGL Land and property rights of the buildings constructed on the WTGL Land; and the WTGL Sale Shares represent all the equity interest in WTGL B, a company to be established and separated from WTGL, an indirectly wholly-owned subsidiary of the Company, as a result of the WTGL Split-off.

Subject to satisfaction or waiver of the conditions precedent set out in the Figures Up SP Agreement and the WTGL SP Agreement, the WTGL Land and Property Rights Completion and the Figures Up Completion shall take place concurrently and the WTGL Sale Shares Completion shall take place within 18 months after the last outstanding condition precedent to such completion is fulfilled.

IMPLICATIONS UNDER THE LISTING RULES

Discloseable transaction

As the highest applicable percentage ratio (as defined under the Listing Rules) in respect of the Figures Up Disposal and the WTGL Disposal, in aggregate, exceeds 5% but is below 25%, the Figures Up Disposal and the WTGL Disposal, in aggregate, constitute a discloseable transaction of the Company under Chapter 14 of the Listing Rules, and is therefore subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

Connected transaction

In view of the fact that each of Purchaser A and Purchaser B is an associate of Mr. Leung, an executive Director and Chairman of the Board, who is interested in an aggregate of 1,530,877,026 Shares, representing approximately 24.77% of the issued share capital of the Company as at the date of this announcement, each of Purchaser A and Purchaser B is a connected person of the Company and accordingly, the Transaction Arrangements and the transactions contemplated thereunder constitute a connected transaction of the Company for the purpose of Chapter 14A of the Listing Rules, and are subject to the reporting, announcement and the Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

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GENERAL

The Independent Board Committee comprising all of the independent non-executive Directors has been established to advise and provide recommendation to the Independent Shareholders on the Transaction Arrangements and the transactions contemplated thereunder and to advise the Independent Shareholders on how to vote. In this connection, the Company has appointed the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders as to whether the Transaction Arrangements are fair and reasonable and are in the interests of the Company and the Shareholders as a whole, and to advise the Independent Shareholders on how to vote.

The EGM will be convened for the purpose of, among other matters, considering, and if thought fit, approving the Transaction Arrangements and the transactions contemplated thereunder. A circular containing, among other things, (i) details of the Transaction Arrangements and the transactions contemplated thereunder and other information as required to be disclosed under the Listing Rules; (ii) the recommendation from the Independent Board Committee to the Independent Shareholders in relation to the Transaction Arrangements and the transactions contemplated thereunder; (iii) a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders; and (iv) a notice of the EGM, is expected to be despatched to the Shareholders on or before 31 December 2018, as additional time is required by the Company for the preparation of certain information for inclusion in the circular.

The Board wishes to announce that after trading hours 16 November 2018, certain members of the Group entered into the Transaction Arrangements which includes the Figures Up SP Agreement and the WTGL SP Agreement, which are summarised as follows.

FIGURES UP SP AGREEMENT

Date

16 November 2018

Parties

(1) Vendor A, an indirect wholly-owned subsidiary of the Company, as vendor; and
(2) Purchaser A as purchaser.

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Assets to be disposed

Purchaser A conditionally agreed to purchase and Vendor A conditionally agreed to sell the Figures Up Sale Shares free from all encumbrances together with all rights now or thereafter attaching thereto, including all dividends or distributions which may be paid, declared or made in respect thereof at any time on or after the Figures Up Completion. The Figures Up Sale Shares represent all the issued shares of Figures Up, an indirect wholly-owned subsidiary of the Company as at the date of this announcement. Please refer to the section headed “Information on the Transaction Arrangements” for further information on Figures Up.

Figures Up Consideration

The Figures Up Consideration for the Figures Up Disposal is RMB40,000,000 (equivalent to HK$45,024,000), which shall be settled at the Figures Up Completion.

The Figures Up Consideration was arrived at after arm’s length negotiation between the parties to the Figures Up SP Agreement on normal commercial terms with reference to, among others, (i) the valuation on the machineries and equipment of Figures Up and its subsidiaries (other than Taili Beijing) (being the principal assets held by Figures Up and its subsidiaries (other than Taili Beijing)) of approximately RMB6.8 million (equivalent to approximately HK$7.7 million) based on the cost approach as at 31 October 2018 prepared by an independent professional valuer; (ii) the adjusted net asset value of Figures Up of approximately HK$23.9 million, as detailed in the section headed “Information on the Transaction Arrangements” below; and (iii) the reasons as set out in the paragraph headed “Reasons for and benefits of the Transaction Arrangements” below.

Conditions precedent to the Figures Up SP Agreement

The Figures Up Completion shall be conditional upon the following conditions precedent:

(1) the entering into of the WTGL SP Agreement and the conditions precedent the WTGL Land and Property Rights Completion having been satisfied in full (or where applicable, waived) (other than the condition precedent relating to the Figures Up SP Agreement having becoming unconditional);
(2) the completion of the Taili Beijing Transfer Agreement having taken place;
(3) the unaudited consolidated cash and bank balances of Figures Up and Taili Dongguan as at the Figures Up Completion not being less than RMB25 million;
(4) the loans owed by Figures Up to the Group having been waived by the relevant member(s) of the Group in full prior to the Figures Up Completion;
(5) the Independent Shareholders having passed the necessary resolution approving the transactions contemplated under the Figures Up SP Agreement and the transactions contemplated thereunder at the EGM;

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(6) all such consents, authorisations and approvals (and as the case may be, waivers) as Vendor A, Purchaser A, and Figures Up each may require in relation to the completion of the transactions contemplated under the Figures Up SP Agreement having been obtained and if such consent, authorisation and approval is conditional, the acceptance of such condition(s) by Vendor A (or as the case may be, Purchaser A) and that such consents, authorisations and approvals remain in full force as at the Figures Up Completion not having been cancelled; and
(7) the completion of the transactions contemplated under the Figures Up Agreement is not subject to restrictions from any applicable laws and regulations or is prohibited or other prohibited in any manner by including any order, injunction, decree or judgment of any court or other government agency.

Purchaser A may waive the conditions precedent (1) and (4) above by written notice to Vendor A. Save as aforesaid, none of the above conditions precedent is capable of being waived by any party to the Figures Up SP Agreement.

If the conditions precedent above cannot be fulfilled (or waived, where applicable) on or before 31 December 2019, the Figures Up SP Agreement shall terminate (save and except certain provisions, including confidentiality and announcements, notices and governing law) and the obligations of the parties to proceed with the Figures Up Completion shall cease and terminate and no party shall have any claim against or liability to the other party with respect to any matter referred to in the Figures Up SP Agreement save for any antecedent breaches of the Figures Up SP Agreement.

Figures Up Completion

The Figures Up Completion shall take place on the 5th Business Day after the last outstanding condition precedent is fulfilled or waived (or such other date as Purchaser A and Vendor A shall agree in writing).

Taili Beijing Transfer Agreement

Concurrent with the entering into of the Figures Up SP Agreement, Beijing Genetech Pharm and Taili Dongguan entered into the Taili Beijing Transfer Agreement to transfer all the equity interest in Taili Beijing held by Taili Dongguan to Beijing Genetech Pharm at a consideration of RMB100,000, equivalent to the paid-up capital of Taili Beijing. As at the date of this announcement, each of Beijing Genetech Pharm, Taili Dongguan and Taili Beijing is an indirect wholly-owned subsidiary of the Company.

The entering into of the Taili Beijing Transfer Agreement relates to an internal restructuring of the Group so as to enable the Group to retain 100% of the equity interest in Taili Beijing in preparation of the Figures Up Disposal. Please refer to the section headed “Information on the Transaction Arrangements” for further information on each of Beijing Genetech Pharm, Taili Dongguan and Taili Beijing.

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WTGL SP AGREEMENT

Date

16 November 2018

Parties

(1) Vendor B, a wholly-owned subsidiary of Vendor A, as vendor; and
(2) Purchaser B as purchaser.

Assets to be disposed

Purchaser B conditionally agreed to purchase and Vendor B conditionally agreed to sell:

(1) the WTGL Land and Property Rights, representing all the economic rights relating to the land use rights of and property rights of the buildings constructed thereon the WTGL Land, which as at the date of this announcement, is held by WTGL, an indirect whollyowned subsidiary of the Company; and
(2) the WTGL Sale Shares, representing all the equity interest in WTGL B, a company to be established and separated from WTGL as a result of the WTGL Split-off, to hold the title of the land use rights of the WTGL Land and property rights of the buildings constructed on the WTGL Land.

Please refer to the section headed “Information on the Transaction Arrangements” for further information on the WTGL Land and WTGL.

WTGL Consideration

The WTGL Consideration for the WTGL Disposal is RMB60,000,000 (equivalent to HK$67,356,000), which shall be settled in the following manner:

(1) first phase: as to RMB$36,000,000 at the WTGL Land and Property Rights Completion;
(2) second phase: as to RMB$12,000,000 on the 5th Business Day after the completion of the WTGL Split-off; or on 31 December 2019 (or if such day is not a Business Day, the immediately preceding Business Day), whichever date is earlier; and
(3) third phase: the remaining RMB12,000,000 at the WTGL Sale Shares Completion; or on 31 December 2019 (or if such day is not a Business Day, the immediately preceding Business Day), whichever date is earlier.

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The WTGL Consideration was arrived at after arm’s length negotiation between the parties to the WTGL SP Agreement on normal commercial terms with reference to, among others, (i) the valuation on the land use rights of and property rights of the buildings constructed thereon the WTGL Land of approximately RMB58.5 million (equivalent to approximately HK$66.3 million) based on the cost approach as at 31 October 2018 prepared by an independent professional valuer and (ii) the reasons as set out in the paragraph headed “Reasons for and benefits of the Transaction Arrangements” below.

Conditions precedent to the WTGL SP Agreement

WTGL Land and Property Rights Completion

The WTGL Land and Property Rights Completion shall be conditional upon the following conditions precedent:

(1) the Independent Shareholders having passed the necessary resolution approving the transactions contemplated under the WTGL SP Agreement and the WTGL Land Cooperative Development Agreement and the transactions contemplated thereunder at the EGM;
(2) all such consents, authorisations and approvals (and as the case may be, waivers) as Vendor B and Purchaser B each may require in relation to the completion of the transactions contemplated under the WTGL SP Agreement having been obtained and if such consent, authorisation and approval is conditional, the acceptance of such condition(s) by Vendor B (or as the case may be, Purchaser B) and that such consents, authorisations and approvals remain in full force as at the WTGL Completion not having been cancelled;
(3) the WTGL Land and Property Rights Completion not being subject to restrictions from any applicable laws and regulations or is prohibited or other prohibited in any manner by including any order, injunction, decree or judgment of any court or other government agency;
(4) all the conditions precedent to the Figures Up SP Agreement having becoming unconditional (or waived, as the case may be) (other than the condition precedent relating the WTGL SP Agreement having becoming unconditional); and
(5) the entering into of the WTGL Land Cooperative Development Agreement.

None of the above conditions precedent is capable of being waived by any party to the WTGL SP Agreement.

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shall cease and terminate and no party shall have any claim against or liability to the other party with respect to any matter referred to in the WTGL SP Agreement save for any antecedent breaches of the WTGL SP Agreement.

WTGL Sale Shares Completion

The WTGL Sale Shares Completion shall be conditional upon the following conditions precedent:

(1) WTGL having completed the WTGL Split-off and the relevant procedures for business change registration and business filing relating thereto having been completed;
(2) the WTGL Land and Property Rights Completion having taken place in accordance with the WTGL SP Agreement;
(3) the titles of the land use rights of the WTGL Land and property rights of the buildings constructed on the WTGL Land having been transferred to WTGL B and the related land use rights and property rights certificates (or equivalent legal documents) having been issued;
(4) all such consents, authorisations and approvals (and as the case may be, waivers) as Vendor B and Purchaser B each may require in relation to the completion of the transactions contemplated under the WTGL SP Agreement having been obtained and if such consent, authorisation and approval is conditional, the acceptance of such condition(s) by Vendor B (or as the case may be, Purchaser B) and that such consents, authorisations and approvals remain in full force as at the WTGL SP Completion not having been cancelled; and
(5) the WTGL Sale Shares Completion not being subject to restrictions from any applicable laws and regulations or is prohibited or other prohibited in any manner by including any order, injunction, decree or judgment of any court or other government agency.

None of the above conditions precedent is capable of being waived by any party to the WTGL SP Agreement.

If the conditions precedent above cannot be fulfilled (or waived, where applicable) on or before 31 December 2019, the WTGL SP Agreement shall terminate (save and except certain provisions, including confidentiality and announcements, notices and governing law) and without prejudice to the WTGL Land and Property Rights Completion having taken place, the obligations of the parties to proceed with the WTGL Sale Shares Completion shall cease and terminate and no party shall have any claim against or liability to the other party with respect to any matter referred to in the WTGL SP Agreement save for any antecedent breaches of the WTGL SP Agreement.

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WTGL Land and Property Rights Completion

Under the WTGL SP Agreement, unless otherwise agreed by Vendor B and Purchaser B, the WTGL Land and Property Rights Completion shall take place on the same day of the Figures Up Completion.

WTGL Sale Shares Completion

The WTGL Sale Shares Completion shall take place within 18 months after the last outstanding condition precedent to the WTGL Sale Shares Completion is fulfilled (or such other date as Purchaser B and Vendor B shall agree in writing).

Other terms of the WTGL SP Agreement

Under the WTGL SP Agreement, for the period (“ Relevant Period ”) of 12 months following (i) the completion of the WTGL Split-off and the titles of the land use rights of and property rights on the WTGL Land having been transferred to WTGL B; or (ii) the WTGL Land Use and Property Rights Completion (whichever period is longer), Purchaser B has undertaken to Vendor B and WTGL that they shall be entitled to use, free of charge, the WTGL Land and property on the WTGL Land. After the Relevant Period, the parties may enter into a lease agreement for the lease of the WTGL Land in which the rental payable shall not be higher than the prevailing market price (such market price to be determined by an independent property valuer). The Company will comply with all applicable requirements under the Listing Rules in respect of such lease arrangement (if any).

In the event that WTGL or, as the case may be, WTGL B shall relocate from the WTGL Land, the Purchaser B shall pay to Vendor B or WTGL an amount to compensate the costs of such relocation incurred by WTGL provided that such amount shall not be less than RMB20,000,000 and not more than RMB30,000,000.

Under the terms of the WTGL SP Agreement, Purchaser B has undertaken and agreed to bear all applicable taxes and fees arising from the WTGL Split-off and the transfer of the WTGL Sale Shares (including without limitation, the applicable taxes and fees arising from the transfer of the titles of the land use rights of the WTGL Land and property rights of the buildings constructed on the WTGL Land to WTGL B), up to a maximum amount of RMB40,000,000.

Transitional arrangement – WTGL Land Cooperative Development Agreement

At the same time of entering into of the WTGL SP Agreement, WTGL, Vendor B and Purchaser B entered into the WTGL Land Cooperative Development Agreement to govern certain matters in relation to the WTGL Land for the period commencing from the WTGL Land Use and Property Rights Completion to the WTGL Sale Shares Completion.

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Pursuant to the WTGL Land Cooperative Development Agreement, Purchaser B shall be responsible for all the capital investment and costs involved in the development of the WTGL Land (“ WTGL Land Development ”), and without prejudice to the interests of WTGL and Vendor B (including but not limited to WTGL/Vendor B’s right to continue to use the land of the WTGL Land and buildings constructed on the WTGL Land under the WTGL SP Agreement), Purchaser B shall be responsible for all matters and bearing all related expenses, taxes and fees relating to the land use rights of and property on the WTGL Land.

Under the WTGL Land Cooperative Development Agreement, Purchaser B shall, without prejudice to the interests of WTGL and Vendor B (including but not limited to WTGL/Vendor B’s right to continue to use the land of the WTGL Land and buildings constructed on the WTGL Land), assume all obligations, responsibilities and risks related to the WTGL Land Development. WTGL and Vendor B shall act in accordance with the legal and appropriate instructions of Purchaser B in respect of matters relating to the land use rights of and property on the WTGL Land, and that the consequences of the legal acts by other third parties within the scope of the instructions shall be borne by Purchaser B in entirety.

INFORMATION ON THE PURCHASERS

Each of Purchaser A and Purchaser B is a company incorporated in BVI with limited liability which is principally engaged in investment holding. As at the date of this announcement, each of Purchaser A and B is owned by the same group of shareholders in identical shareholdings, in which:

(1) the mother of Mr. Leung, an executive Director and Chairman of the Board, is an indirect 60% shareholder of each of Purchaser A and Purchaser B;
(2) Mr. Chen Dawei, an executive Director, is an indirect 10% shareholder of each of Purchaser A and Purchaser B;
(3) Vital Vigour, a substantial shareholder of the Company, is an associate of an indirect 15% shareholder of each of Purchaser A and Purchaser B; and
(4) each of Mr. Leung, Mr. Chen Dawei, the mother of Mr. Leung and a brother of Mr. Leung is a director of each of Purchaser A and Purchaser B.

Accordingly, each of Purchaser A and Purchaser B is an associate of Mr. Leung and each of Purchaser A and Purchaser B is a connected person of the Company under the Listing Rules.

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INFORMATION ON THE TRANSACTION ARRANGEMENTS

As at the date of this announcement:

(1) Vendor A is principally engaged in investment holding and provision of management services and an indirect wholly-owned subsidiary of the Company;
(2) Figures Up is principally engaged in investment holding and a wholly-owned subsidiary of Vendor A;
(3) Taili Dongguan is principally engaged in research and development of pharmaceutical products and an indirect wholly-owned subsidiary of Figures Up;
(4) Taili Beijing is principally engaged in provision of research services to the pharmaceutical industry and a wholly-owned subsidiary of Taili Dongguan;
(5) Vendor B is principally engaged in investment holding and a wholly-owned subsidiary of Vendor A;
(6) WTGL is principally engaged in manufacture and sales of biological pharmaceutical products and a wholly-owned subsidiary of Vendor B; and
(7) Beijing Genetech Pharm is principally engaged in manufacture and sales of chemical and biological products and an indirect wholly-owned subsidiary of the Company.

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A group structure of the above members of the Group as at the date of this announcement is set out below:

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The Company
100%
Vendor A
100% 100% 100%
A subsidiary of
Figures Up Vendor B
the Company
100% 100% 100%
Beijing
Taili Dongguan WTGL
Genetech Pharm
100%
Taili Beijing
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WTGL is principally engaged in manufacturing and selling of biological pharmaceutical products and is the registered holder of the land use rights of the WTGL Land, a land located at Nanshan district, Shenzhen, the PRC with a total site area of 8,129 sq.m. with usage for industrial purposes with the term of 50 years. As at the date of this announcement, the WTGL Land is used by the Group for its own use, housing and the manufacturing and operation site for the Group’s in-house biological pharmaceutical products, GeneTime[®] and GeneSoft[®] . The Group is in the process of implementing the WTGL Split-off whereby the title and land use rights of the WTGL Land and property rights of the buildings constructed on the WTGL Land will be vested in WTGL B and all remaining assets and liabilities will remain in the surviving WTGL.

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Under the Transaction Arrangements, it is contemplated that, among other things:

(1) pursuant to the Taili Beijing Transfer Agreement, Taili Beijing shall remain as a member of the Group and will be wholly owned by Beijing Genetech Pharm; and
(2) the WTGL Land is to be disposed of to Purchaser B by way of the WTGL Disposal – the WTGL Land and Property Rights shall be transferred to Purchaser B, and after the completion of the WTGL Split-off, the titles of the land use rights of the WTGL Land and property rights of the buildings constructed on the WTGL Land shall be transferred to WTGL B and the WTGL Sale Shares shall be transferred to Purchaser B.

Set out below is a summary of certain unaudited combined financial information of Figures Up (excluding the financial information of Taili Beijing for this purpose in which Taili Beijing shall remain to be a member of the Group upon the Figures Up Disposal) for the six months ended 30 June 2018 and the two years ended 31 December 2017 and 2016:

	For the
	six months	For the	For the
	ended	year ended	year ended
	30 June	31 December	31 December
	2018	2017	2016
	HK$’000	HK$’000	HK$’000
	approximately	approximately	approximately
Loss before taxation	7,719	204,005	24,794
Loss after taxation	7,719	204,005	24,794

As at 30 June 2018, the unaudited total asset value of Figures Up (excluding the financial information of Taili Beijing for this purpose) was approximately HK$26.5 million and the adjusted net asset value of Figures Up (excluding the financial information of Taili Beijing for this purpose) was approximately HK$23.9 million. Such adjusted net asset value represents the net liability value as adjusted by (i) the minimum cash and bank balances of Figures Up and Taili Dongguan of RMB25 million (equivalent to approximately HK$28.1 million) to be maintained at the Figures Up Completion as required under the Figures Up SP Agreement; and (ii) the waiver of all the loans owing from Figures Up to Vendor A, which such loans amount to approximately HK$582.1 million.

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Set out below is a summary of certain unaudited combined financial information of the assets attributable to the subject matter of the WTGL SP Agreement under the WTGL Disposal (which includes the WTGL Land and property rights of the buildings constructed on the WTGL Land to be vested in WTGL B) for the six months ended 30 June 2018 and the two years ended 31 December 2017 and 2016:

	For the
	six months	For the	For the
	ended	year ended	year ended
	30 June	31 December	31 December
	2018	2017	2016
	HK$’000	HK$’000	HK$’000
	approximately	approximately	approximately
Loss before taxation	463	1,852	1,838
Loss after taxation	463	1,852	1,838

As at 30 June 2018, the unaudited total asset value and net asset value of the assets attributable to the subject matter of the WTGL SP Agreement under the WTGL Disposal were approximately HK$27.1 million and HK$27.1 million respectively.

Upon completion of the Transaction Arrangements:

(1) each of Figures Up and Taili Dongguan shall cease to be a subsidiary of the Company upon the Figures Up Completion;
(2) Taili Beijing shall remain to be a subsidiary of the Company; and
(3) WTGL shall remain to be a subsidiary of the Company but the Group shall cease to account for the economic benefits in respect of the WTGL Land and Property Rights and WTGL B shall cease to be a subsidiary of the Company upon the WTGL Sale Shares Completion.

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REASONS FOR AND BENEFITS OF THE TRANSACTION ARRANGEMENTS

The Group is principally engaged in the manufacture and sales of pharmaceutical products and operates through four segments, namely, (a) In-house Chemical Pharmaceutical Products; (b) In-house Biological Pharmaceutical Products; (c) In-house Biological Pipeline; and (d) Thirdparty Pharmaceutical Products. The Group’s In-house Chemical Pharmaceutical Products segment is engaged in the manufacture and sales of in-house chemical pharmaceutical products, which include Pinup[®] , among others. The Group’s In-house Biological Pharmaceutical Products segment is engaged in the manufacture and sales of in-house biological pharmaceutical products, which include GeneTime[®] and GeneSoft[®] , among others. The Group’s In-house Biological Pipeline segment is engaged in the industrialisation of inhouse biological pipeline, which biological pipeline products include Uni-E4 and Uni-PTH, among others. The Group’s Third-party Pharmaceutical Products segment is engaged in the sales of third-party pharmaceutical products.

The Directors are of the view that the Disposal will enable the Group to streamline its business operations, rationalise its asset composition and enable it to focus on its core business, which is the manufacturing and sales of pharmaceutical products. The strategic positioning of the Group is to focus on endocrinology, ophthalmology and dermatology, while providing the Group with an inflow of low cost capital. In this regard, the research and development business of Figures Up is focused on non-core therapeutic areas, specifically anemia, which is unrelated to the Group’s strategic focus on endocrinology, ophthalmology and dermatology, The manufacturing technology (mammalian expression system) required to commercialised future projects from Figures Up (for example, FC fusion protein technology) is different to that utilised by other subsidiaries of the Group. For example, the manufacturing technology used by the Group in its in-house biological pharmaceutical products and in-house biological pipeline utilises the E. coli expression manufacturing technology. Based on the estimation of the Group, the future projects of Figures Up will require at least another 5 to 10 years before commercialisation, in which the Group intends that capital and resources shall be redeployed to other projects for example liquid formulation of pipeline products indicate in osteoporosis and diabetes which is expected to have faster return on investments. Through the Figures Up Disposal and the WTGL Disposal, it is expected that the proceeds therefrom will provide working capital to focus on the development of 2nd generation Uni-E4 and Uni-PTH projects of the Group, which are expected to commercialise within 5 years based on the current timetables.

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Taking into account the recent macro trends of the capital markets (for example, the ongoing trade war, the tightening of credit and geopolitical uncertainties), to obtain further funds to facilitate the Group’s strategic positioning as described above, fund raising via equity is considered to be relatively expensive to the current Shareholders. At the same time, banks and financial institutions in China now take a cautious attitude towards commercial loans and as assessed by the management of the Group, availability of funds via loans for companies the business and operations of which are similar to the Group, are limited and most of the operating profit requirement is high, such that fund raising through debt is also not considered to be a cost-effective option of the Group. Taking into account the above, the Group considers that Disposal is in the preferred method to raise further funds for the Group at the current situation in order to provide funding and to enable the Group to focus on its core business. Under terms of the WTGL SP Agreement, upon completion of the WTGL Disposal, the Group will still be entitled to use, free of charge, the land of and property on the WTGL Land for a period 12 months following the completion of the WTGL Split-off and the titles of the land use rights of and property rights on the WTGL Land having been transferred to WTGL B or the WTGL Land Use and Property Rights Completion, whichever period is longer, which the Group intends to continue the manufacturing process of in-house biological pharmaceutical products in the current site on the WTGL Land and allow for more time to locate potential sites for relocation, if required, and in the event that the Group shall relocate from the WTGL Land, Purchaser B shall pay to the Group to compensate the costs of such relocation incurred.

The Directors expect to recognise an unaudited gain of approximately HK$41 million from the Disposal, being the gain from disposal of equity interest of R&D platform and the disposal of land and property. Shareholders should note that the actual amount of gain/loss on the Disposal to be recorded by the Company will be subject to review by the auditors of the Company and depend on the net asset/liability value of Figures Up and WTGL B on the their respective date of completion of disposal. It is expected that the proceeds from the Disposal will be used for research and development expenses over the Company’s pipeline products oriented to osteoporosis and diabetes and for general working capital.

The terms of each of the Figures Up SP Agreement and the WTGL SP Agreement were determined after arm’s length negotiations between the parties thereto. In light of the reasons above, the Directors (other than the independent non-executive Directors whose views will be formed after taking into account the advice of the Independent Financial Adviser) are of the view that the terms of the Transaction Arrangements and the transactions contemplated thereunder are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

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IMPLICATIONS UNDER THE LISTING RULES

Discloseable transaction

As the highest applicable percentage ratio (as defined under the Listing Rules) in respect of the Figures Up Disposal and the WTGL Disposal, in aggregate, exceeds 5% but is below 25%, the Figures Up Disposal and the WTGL Disposal constitute a discloseable transaction of the Company under Chapter 14 of the Listing Rules, and is therefore subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

Connected transaction

Given that (1) each of Purchaser A and Purchaser B is an associate of Mr. Leung, an executive Director and Chairman of the Board; (2) Mr. Chen Dawei, an executive Director, is an indirect 10% shareholder of each of Purchaser A and Purchaser B; and (3) an indirect 15% shareholder of each of Purchaser A and Purchaser B is an associate of Ms. Lau Chau In, a non-executive Director, each of Mr. Leung, Mr. Chen Dawei and Ms. Lau Chau In had abstained from voting on the resolutions of the Board to approve the Transaction Arrangements and the transactions contemplated thereunder. Save as disclosed above, none of the other Directors had material interests in the transactions contemplated under the Acquisition and accordingly, no other Director was required to abstain on the resolutions at the Board meeting held to approve the Transaction Arrangements and the transactions contemplated thereunder.

GENERAL

In this connection, the Company has appointed the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders as to whether the Transaction Arrangements are fair and reasonable and are in the interests of the Company and the Shareholders as a whole, and to advise the Independent Shareholders on how to vote.

– 17 –

The EGM will be convened for the purpose of, among other matters, considering, and if thought fit, approving the Transaction Arrangements and the transactions contemplated thereunder. A circular containing, among other things, (i) details of the Transaction Arrangements and the transactions contemplated thereunder and other information as required to be disclosed under the Listing Rules; (iii) the recommendation from the Independent Board Committee to the Independent Shareholders in relation to the Transaction Arrangements and the transactions contemplated thereunder; (iv) a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders; and (v) a notice of the EGM, is expected to be despatched to the Shareholders on or before 31 December 2018, as additional time is required by the Company for the preparation of certain information for inclusion in the circular.

To the best knowledge of the Directors, save for (1) Mr. Leung and his associates, who together as at the date of this announcement hold 1,530,877,026 Shares representing approximately 24.77% of the issued Shares; (2) Mr. Chen Dawei and his associates, who together as at the date of this announcement hold 330,955,516 Shares representing approximately 5.36% of the issued Shares; and (3) Vital Vigour and its associates, who together as at the date of this announcement hold 873,360,000 Shares, representing approximately 14.13% of the issued Shares, each of which are required to abstain from voting on the resolutions to be proposed at the EGM, no Shareholder had a material interest in the Transaction Arrangements and the transactions contemplated thereunder, and no other Shareholder would be required to abstain from voting at the EGM in respect of the resolutions relating to the Transaction Arrangements and the transactions contemplated thereunder.

WARNING

Shareholders and potential investors should note that the completion of the Transaction Arrangements is subject to the satisfaction and/or waiver (where applicable) of a number of conditions, including but not limited to Independent Shareholders’ approval, and accordingly, the transactions contemplated thereunder may or may not proceed. Shareholders and potential investors should exercise extreme caution when dealing in the securities of the Company.

DEFINITIONS

Unless otherwise specified, the following terms have the following meanings in this announcement:

“associate” has the meaning ascribed to it in the Listing Rules “Beijing Genetech Pharm” 北京博康健基因科技有限公司 ( B e i j i n g G e n e t e c h Pharmaceutical Co., Limited*), a limited liability company established in the PRC and an indirect whollyowned subsidiary of the Company as at the date of this announcement

– 18 –

“Board” the board of Directors “Business Day” a day (other than a Saturday, Sunday or public holiday) on which licensed banks in Hong Kong are generally open for business
“BVI” the British Virgin Islands “Company” Uni-Bio Science Group Limited, a company incorporated in the Cayman Islands with limited liability whose Shares are listed on the Main Board of the Stock Exchange (Stock code: 690)
“connected person” has the meaning ascribed to it in the Listing Rules “Director(s)” the director(s) of the Company “Disposal” the Figures Up Disposal and the WTGL Disposal “EGM” an extraordinary general meeting of the Company to be convened for the purpose of considering and, if thought fit, approving the Transaction Arrangements and the transactions contemplated thereunder
“Figures Up” Figures Up Trading Limited, a company incorporated in BVI with limited liability and an indirect whollyowned subsidiary of the Company as at the date of this announcement
“Figures Up Completion” completion of the Figures Up Disposal
“Figures Up Consideration” the aggregate consideration payable for the Figures Up Sale Shares under the Figures Up SP Agreement
“Figures Up Disposal” the disposal of the Figures Up Sale Shares by Vendor A to Purchaser A pursuant to the Figures Up SP Agreement
“Figures Up Sale Shares” 100 shares of US$1.00 each of Figures Up, representing all the issued shares of Figures Up as at the date of this announcement and at the Figures Up Completion
“Figures Up SP Agreement” the share transfer agreement dated 16 November 2018 entered into between Vendor A and Purchaser A in relation to the Figures Up Disposal

– 19 –

“Group”

the Company and its subsidiaries and “member(s) of the Group” shall be construed accordingly

“HK$”

Hong Kong dollars, the lawful currency of Hong Kong

“Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China

“Independent Board an independent committee of the Board (which comprises Committee” all the independent non-executive Directors) established to advise the Independent Shareholders with regard to the Transaction Arrangements and the transactions contemplated thereunder
“Independent Financial Amasse Capital Limited, a licensed corporation to carry Adviser” on Type 2 (dealing in securities) and Type 6 (advising on corporate finance) regulated activity under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), for the purpose of advising the Independent Board Committee and the Independent Shareholders as to the Transaction Arrangements and the transactions contemplated thereunder
“Independent Shareholders” Shareholders other than Mr. Leung, Mr. Chen Dawei and Vital Vigour, and those who are involved in or interested in the Transaction Arrangements, and their respective associates
“Independent Third Party” third party independent of the Company and the connected persons of the Company
“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange
“Mr. Leung” Mr. Kingsley Leung, an executive Director and the Chairman of the Board
“PRC” the People’s Republic of China, which for the purpose of this announcement, excludes Hong Kong, the Macau Special Administrative Region of the People’s Republic of China and Taiwan
“Purchaser A” Greater Bay (R&D) Capital Limited, a company incorporated in BVI with limited liability
“Purchaser B” Greater Bay Capital Limited, a company incorporated in BVI with limited liability

– 20 –

“Purchasers” Purchaser A and Purchaser B, and “Purchaser” shall mean either of them as the context may require “RMB” Renminbi, the lawful currency of the PRC “Share(s)” ordinary shares of HK$0.01 each in the share capital of the Company “Shareholder(s)” holder(s) of the Shares “sq.m” square metres

“Stock Exchange” The Stock Exchange of Hong Kong Limited

“Taili Beijing” 北京太力生物工程有限公司 (Beijing Taili Biotech Co., Limited*), a limited liability company established in the PRC and an indirect wholly-owned subsidiary of the Company

“Taili Beijing Transfer the equity transfer agreement dated 16 November 2018 Agreement” entered into between Taili Dongguan and Beijing Genetech Pharm further particulars of which are set out in the section headed “Figures Up SP Agreement – Taili Beijing Transfer Agreement” in this announcement
“Taili Dongguan” 東莞太力生物工程有限公司 (Dongguan Taili Biotech Co., Limited*), a limited liability company established in the PRC and an indirect wholly-owned subsidiary of the Company as at the date of this announcement
“Transaction Arrangements” the transactions contemplated under the Figures Up SP Agreement and the WTGL SP Agreement
“US$” United States Dollars, the lawful currency of the United States of America
“Vendor A” Uni-Bio Science Healthcare Limited, a company incorporated in Hong Kong with limited liability and an indirect whollyowned subsidiary of the Company
“Vendor B” Zethanel Properties Limited, a company incorporated in BVI with limited liability and an indirect wholly-owned subsidiary of the Company

“Vital Vigour” Vital Vigour Limited, a company incorporated in the Cayman Islands with limited liability and a substantial shareholder of the Company as at the date of this announcement

– 21 –

“WTGL” 深圳市華生元基因工程發展有限公司 (Shenzhen Watsin Genetech Limited*), a limited liability company established in the PRC and an indirect wholly-owned subsidiary of the Company as at the date of this announcement
“WTGL B”
a company to be established and separated from WTGL pursuant to the WTGL Split-off
“WTGL Completion” together, the WTGL Land and Property Rights Completion and the WTGL Sale Shares Completion
“WTGL Consideration”
the aggregate consideration payable for the WTGL Land and Property Rights and the WTGL Sale Shares under the WTGL SP Agreement
“WTGL Disposal” the disposal of the WTGL Land and Property Rights and the WTGL Sale Shares by Vendor B to Purchaser B pursuant to the WTGL SP Agreement
“WTGL Land” a land parcel located at Nanshan district, Shenzhen, the PRC with a total site area of 8,129 sq.m, registered under the name of WTGL as at the date of this announcement
“WTGL Land and Property Rights”
all the economic rights relating to the land use rights of the WTGL Land and property rights of the buildings constructed on the WTGL Land
“WTGL Land and Property completion of the disposal of the WTGL Land and Property Rights Completion” Rights pursuant to the WTGL SP Agreement
“WTGL Land Cooperative Development Agreement”
the cooperative development agreement dated 16 November 2018 entered into between WTGL, Vendor B and Purchaser B further particulars of which are set out in the section headed “WTGL SP Agreement – Transitional arrangement – WTGL Land Cooperative Development Agreement” in this announcement
“WTGL Sale Shares” all the equity interest in WTGL B as at the date of the WTGL Sale Shares Completion
“WTGL Sale Shares completion of the disposal of the WTGL Sale Shares Completion” pursuant to the WTGL SP Agreement

“WTGL SP Agreement” the share transfer agreement dated 16 November 2018 entered into between Vendor B and Purchaser B in relation to the WTGL Disposal

– 22 –

“WTGL Split-off”

the proposed split-off （分立） to be undertaken by WTGL whereby the assets and liabilities will be taken up by two entities, namely, the surviving WTGL and WTGL B separately

“%”

per cent.

In this announcement, for the purpose of illustration only, amounts quoted in RMB have been converted into HK$ at the rate of RMB1 to HK$1.1256. Such exchange rate has been used, where applicable, for the purpose of illustration only and does not constitute a representation that any amounts were or may have been exchanged at this or any other rates or at all.

On behalf of the Board Uni-Bio Science Group Limited Kingsley Leung Chairman

Hong Kong, 16 November 2018

As at the date of this announcement, the Board comprises two executive Directors, namely, Mr. Kingsley Leung (Chairman) and Mr. Chen Dawei (Vice-chairman); one non-executive Director, Ms. Lau Chau In and three independent non-executive Directors, namely, Mr. Zhao Zhi Gang and Mr. Chow Kai Ming and Mr. Ren Qimin.

– 23 –

AI assistant

Uni-Bio Science Group Limited — M&A Activity 2018

49397_rns_2018-11-16_398e7dbd-accb-49f9-b2ee-337c43fcd18d.pdf

UNI-BIO SCIENCE GROUP LIMITED 聯康生物科技集團有限公司[*]

(Stock code: 0690)

DISCLOSEABLE AND CONNECTED TRANSACTIONS – TRANSACTION ARRANGEMENTS

Financial Adviser to the Purchasers

IMPLICATIONS UNDER THE LISTING RULES

Discloseable transaction

Connected transaction

GENERAL

FIGURES UP SP AGREEMENT

Date

Parties

Assets to be disposed

Figures Up Consideration

Conditions precedent to the Figures Up SP Agreement

Figures Up Completion

Taili Beijing Transfer Agreement

WTGL SP AGREEMENT

Date

Parties

Assets to be disposed

WTGL Consideration

Conditions precedent to the WTGL SP Agreement

WTGL Land and Property Rights Completion

WTGL Sale Shares Completion

WTGL Land and Property Rights Completion

WTGL Sale Shares Completion

Other terms of the WTGL SP Agreement

Transitional arrangement – WTGL Land Cooperative Development Agreement

INFORMATION ON THE PURCHASERS

INFORMATION ON THE TRANSACTION ARRANGEMENTS

REASONS FOR AND BENEFITS OF THE TRANSACTION ARRANGEMENTS

IMPLICATIONS UNDER THE LISTING RULES

Discloseable transaction

Connected transaction

GENERAL

WARNING

DEFINITIONS

“WTGL Split-off”

On behalf of the Board Uni-Bio Science Group Limited Kingsley Leung Chairman

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Uni-Bio Science Group Limited M&A Activity 2018