WH Group Limited - Capital/Financing Update 2021

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 any securities of the Company.

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China Baoli Technologies Holdings Limited 中國寶力科技控股有限公司

(Incorporated in Bermuda with limited liability)

(Stock Code: 164)

(I) PROPOSED CAPITAL REORGANISATION; AND

(II) PROPOSED RIGHTS ISSUE ON THE BASIS OF ONE (1) RIGHTS SHARE FOR EVERY TWO (2) NEW SHARES HELD ON THE RECORD DATE

Underwriters to the Rights Issue

Kingkey Securities Group Limited

Koala Securities Limited

(I) PROPOSED CAPITAL REORGANISATION

The Board proposes to implement the Capital Reorganisation which comprises the following:

(i) the consolidation of every ten (10) issued and unissued Existing Shares of par value of HK$0.10 each in the authorised share capital of the Company into one (1) Consolidated Share of par value of HK$1.00 each in the authorised share capital of the Company;

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(ii) the reduction of the issued share capital of the Company (a) by eliminating any fraction of a Consolidated Share in the issued share capital of the Company arising from the Share Consolidation in order to round down the total number of Consolidated Shares to a whole number; and (b) through a cancellation of the paid up capital of the Company to the extent of HK$0.99 on each of the issued Consolidated Shares such that the par value of each issued Consolidated Share will be reduced from HK$1.00 to HK$0.01;
(iii) the subdivision of every unissued Consolidated Share of HK$1.00 each in the authorised share capital of the Company (including the unissued Consolidated Shares resulting from the Capital Reduction) into one hundred (100) New Shares of HK$0.01 each; and
(iv) the transfer of the credit arising from the Capital Reduction to the Contributed Surplus Account in order to enable the application of the necessary amount in the Contributed Surplus Account in such manner as the Board may deem fit including setting off the accumulated losses of the Company in the manner permitted by the laws of Bermuda and the Bye-laws.

Shareholders and potential investors of the Company should note that the Capital Reorganisation is conditional upon satisfaction of conditions set out in the paragraph headed ‘‘Conditions of the Capital Reorganisation’’ in this announcement. Therefore, the Capital Reorganisation may or may not proceed. Shareholders and potential investors of the Company are advised to exercise caution when dealing in the securities of the Company, and if they are in any doubt about their position, they should consult their professional advisers.

(II) PROPOSED RIGHTS ISSUE

The Company proposes to raise up to approximately HK$74.43 million before expenses by way of the Rights Issue, by issuing up to 186,078,061 Rights Shares (assuming no Shares are issued and no repurchase of Shares on or before the Record Date) at the Subscription Price of HK$0.40 per Rights Share on the basis of one (1) Rights Share for every two (2) New Shares held on the Record Date. The Rights Issue is conditional on, among other things, the Capital Reorganisation becoming effective.

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The net proceeds from the Rights Issue after deducting the expenses, which will be borne by the Company, are estimated to be not more than approximately HK$70 million. Assuming the net proceeds from the Rights Issue will amount to approximately HK$70 million, the Company intends to apply such net proceeds as to approximately (i) 20% (approximately HK$14 million) of net proceeds for the reimbursement for trade and other payables accounts, in particular with regard to long-term outstanding payables; (ii) 10% (approximately HK$7 million) of net proceeds for payment for the annual license fee for train media platform; (iii) 50% (approximately HK$35 million) of net proceeds for repayment for bank and other borrowings, in particular to settle the borrowings with close maturity date and relatively high finance costs; and (iv) the remaining 20% (approximately HK$14 million) of net proceeds for the Group’s general working capital (including but not limited to (a) the operating cashflow for business collaboration with Chun Mian Network Technology (Shanghai) Co., Ltd. (as disclosed in the announcement of the Company dated 8 June 2021) to expand its scale of convergence media business; and (b) payment for daily operating expenses such as rental, salaries, legal and professional expenses). In the event that there is an under-subscription of the Rights Issue, the net proceeds of the Rights Issue will be utilised in proportion to the above uses.

Underwriting Agreement

On 14 July 2021 (after trading hours), the Company and the Underwriters entered into the Underwriting Agreement in relation to the underwriting and respective arrangements in respect of the Rights Issue.

Pursuant to the Underwriting Agreement, the Underwriters have conditionally agreed to underwrite, on a best effort basis, the Underwritten Shares up to 186,078,061 Rights Shares (assuming no Shares are issued and no repurchase of Shares on or before the Record Date), subject to the terms and conditions set out in the Underwriting Agreement, in particular the fulfilment of the conditions precedent contained therein. Details of the major terms and conditions precedent of the Underwriting Agreement are set out in the section headed ‘‘THE UNDERWRITING AGREEMENT’’ in this announcement.

The Rights Issue is only underwritten on a best effort basis. Pursuant to the Company’s constitutional documents and the Companies Act, there are no requirements for minimum levels of subscription in respect of the Rights Issue. Subject to fulfilment or satisfaction of the conditions precedent of the Rights Issue, the Rights Issue shall proceed regardless of its level of acceptances, and up to 186,078,061 Rights Shares are committed to be subscribed subject, however, to any Scaling-down vis-a-vis the MGO Obligation or the Public Float Requirement.

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In the event of under-subscription, any Rights Shares not taken up by the Qualifying Shareholders whether under PAL(s) or EAF(s), or transferees of nil-paid Rights Shares, and not subscribed by subscribers procured by the Underwriters (or either of them, whichever shall be appropriate) will not be issued, and hence, the size of the Rights Issue will be reduced accordingly. Investors are advised to exercise caution when dealing in the Shares.

WARNING OF THE RISKS OF DEALING IN THE EXISTING SHARES AND NIL-PAID RIGHTS SHARES

Shareholders and potential investors of the Company should note that the proposed Rights Issue is conditional upon, among others, the Underwriting Agreement having become unconditional and the Underwriters not having terminated the Underwriting Agreement in accordance with the terms thereof (a summary of which is set out in the paragraph headed ‘‘Conditions precedent of the Rights Issue’’ and ‘‘Termination of the Underwriting Agreement’’ in this announcement). Accordingly, the Rights Issue may or may not proceed.

Any Shareholder or other person dealing in the Existing Shares, the New Shares and/or the nil-paid Rights Shares up to the date on which all the conditions precedent to which the Rights Issue are fulfilled or waived (as applicable) (and the date on which the Underwriters’ right of termination of the Underwriting Agreement ceases) will accordingly bear the risk that the Rights Issue may not become unconditional or may not proceed.

Shareholders and potential investors of the Company are advised to exercise caution when dealing in the Existing Shares, New Shares and/or the nil-paid Rights Shares. Any party (including the Shareholders and potential investors of the Company) who is in any doubt about his/her/its position or any action to be taken is recommended to consult his/ her/its own professional adviser(s).

The Company will apply to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Rights Shares (in both nil-paid and fully-paid forms) to be allotted and issued pursuant to the Rights Issue.

LISTING RULES IMPLICATIONS

The Capital Reorganisation is subject to, among other things, the passing of a special resolution by the Shareholders approving the same at the SGM.

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As the proposed Rights Issue will not increase the number of issued Shares or the market capitalisation of the Company by more than 50% (on its own or when aggregated with any other rights issues or open offers announced by the Company (i) within the 12 month period immediately preceding the announcement of the proposed rights issue or (ii) prior to such 12 month period where dealing in respect of the shares issued pursuant thereto commenced within such 12 month period, together with any bonus securities, warrants or other convertible securities (assuming full conversion) granted or to be granted to the Shareholders as part of such rights issues or open offers) and the Rights Issue is not underwritten by a Director, chief executive or substantial Shareholder (or any of their respective close associates), the Rights Issue is not conditional upon approval by the Shareholders.

GENERAL

The SGM will be convened and held for the Shareholders to consider and, if thought fit, approve the Capital Reorganisation. A circular containing, among other things, (i) further details of the proposed Capital Reorganisation; and (ii) a notice convening the SGM, is expected to be despatched to the Shareholders on or before 5 August 2021.

Upon the approval of the Capital Reorganisation, the Prospectus Documents containing further information on the Rights Issue is expected to be despatched to the Qualifying Shareholders on 13 September 2021. The Prospectus will be despatched to the Excluded Shareholders for information only.

(I) PROPOSED CAPITAL REORGANISATION

The Board proposes to implement the Capital Reorganisation which comprises the following:

(i) the consolidation of every ten (10) issued and unissued Existing Shares of par value of HK$0.10 each in the authorised share capital of the Company into one (1) Consolidated Share of par value of HK$1.00 each in the authorised share capital of the Company;
(ii) the reduction of the issued share capital of the Company (a) by eliminating any fraction of a Consolidated Share in the issued share capital of the Company arising from the Share Consolidation in order to round down the total number of Consolidated Shares to a whole number; and (b) through a cancellation of the paid up capital of the Company to the extent of HK$0.99 on each of the issued Consolidated Shares such that the par value of each issued Consolidated Share will be reduced from HK$1.00 to HK$0.01;

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(iii) the subdivision of every unissued Consolidated Share of HK$1.00 each in the authorised share capital of the Company (including the unissued Consolidated Shares resulting from the Capital Reduction) into one hundred (100) New Shares of HK$0.01 each; and
(iv) the transfer of the credit arising from the Capital Reduction to the Contributed Surplus Account in order to enable the application of the necessary amount in the Contributed Surplus Account in such manner as the Board may deem fit including setting off the accumulated losses of the Company in the manner permitted by the laws of Bermuda and the Bye-laws.

Effects of the Capital Reorganisation

As at the date of this announcement, the authorised share capital of the Company is HK$650,000,000 divided into 6,500,000,000 Existing Shares of par value of HK$0.10 each, of which 3,721,561,225 Existing Shares have been issued as fully paid or credited as fully paid.

Upon the Capital Reorganisation becoming effective and assuming that no further Existing Shares will be issued or repurchased from the date of this announcement until the effective date of the Capital Reorganisation, the authorised share capital of the Company will be HK$650,000,000 divided into 65,000,000,000 New Shares of par value of HK$0.01 each, and the issued share capital of the Company will be reduced to HK$3,721,561.22 divided into 372,156,122 New Shares in issue which are fully paid or credited as fully paid.

The credit of HK$368,434,561.28 arising from the Capital Reduction will be transferred to the Contributed Surplus Account and the Board will be authorised to utilise credits in the Contributed Surplus Account in such manner as permissible under the Bye-laws and the Companies Act, including to set off against the accumulated losses of the Company.

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Assuming there will be no change in the number of issued share capital of the Company from the date of this announcement and up to the date on which the Capital Reorganisation becomes effective, the share capital structure of the Company will be as follows:

			Immediately upon the	Immediately after the
	As at the date of this		Share Consolidation	Capital Reorganisation
		announcement	becoming effective	becoming effective
		HK$0.10	HK$1.00	HK$0.01
Par value	per Existing Share		per Consolidated Share	per New Share
Authorised:
Authorised share capital		HK$650,000,000	HK$650,000,000	HK$650,000,000
Number of authorised shares		6,500,000,000	650,000,000	65,000,000,000
		Existing Shares	Consolidated Shares	New Shares
Issued:
Number of issued shares		3,721,561,225	372,156,122	372,156,122
		Existing Shares	Consolidated Shares	New Shares
Issued share capital	HK$372,156,122.50		HK$372,156,122.00	HK$3,721,561.22
Unissued:
Number of unissued shares		2,778,438,775	277,843,878	64,627,843,878
		Existing Shares	Consolidates Shares	New Shares

Other than the relevant expenses, including but not limited to professional fees and printing charges to be incurred, the implementation of the Capital Reorganisation will have no material effect on the consolidated net asset value of the Group, nor will it alter the underlying assets, business, operations, management or financial position of the Company or the proportionate shareholding interests of the Shareholders, save for any fractional New Shares which will be dealt with as described under ‘‘Fractional entitlement to the New Shares’’ below. The Board believes that the Capital Reorganisation will not have any material adverse effect on the financial position of the Group or its overall net asset value.

Status of the New Shares

All New Shares in issue immediately following the Capital Reorganisation becoming effective will rank pari passu in all respects with each other in accordance with the Bye-laws and the Capital Reorganisation will not result in any change in the relative rights of the Shareholders, save for any fractional New Share which may arise.

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Conditions of the Capital Reorganisation

The implementation of the Capital Reorganisation is conditional upon:

(i) the passing of a special resolution by the Shareholders approving the Capital Reorganisation at the SGM;
(ii) the Stock Exchange granting the listing of, and permission to deal in, the New Shares in issue and to be issued upon the Capital Reorganisation becoming effective; and
(iii) the compliance with the relevant procedures and requirements under the Companies Act and the Listing Rules to effect the Capital Reorganisation, which includes publication of a notice in relation to the Capital Reduction in Bermuda in accordance with the Companies Act and the Directors being satisfied that on the date the Capital Reorganisation is to take effect, there are no reasonable grounds for believing that the Company is, or after the Capital Reorganisation would be, unable to pay its liabilities as they become due.

Subject to the fulfilment of the conditions mentioned above, the Capital Reorganisation is expected to become effective on Wednesday, 1 September 2021, being the second business day after the date of passing of the relevant resolution approving the Capital Reorganisation at the SGM.

Listing Application

An application will be made by the Company to the Stock Exchange for the listing of, and permission to deal in, the New Shares in issue and to be issued upon the Capital Reorganisation becoming effective.

Subject to the granting of the listing of, and permission to deal in, the New Shares on the Stock Exchange, as well as compliance with the stock admission requirements of HKSCC, the New Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the New Shares on the Stock Exchange or such other date as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second settlement day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time. All necessary arrangements will be made for the New Shares to be admitted into CCASS established and operated by HKSCC.

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None of the Existing Shares or any debt securities of the Company are listed or dealt in on any other stock exchange other than the Stock Exchange, and at the time the Capital Reorganisation becomes effective, the New Shares in issue will not be listed or dealt in on any stock exchange other than the Stock Exchange, and no such listing or permission to deal is being or is proposed to be sought.

REASONS FOR THE CAPITAL REORGANISATION

Under Rule 13.64 of the Listing Rules, where the market price of the securities of an issuer approaches the extremities of HK$0.01 or HK$9,995.00, the Stock Exchange reserves the right to require the issuer either to change the trading method or to proceed with a consolidation or splitting of its securities.

The Existing Shares have been trading below HK$0.10 and a board lot of the Existing Shares has been traded below HK$2,000. As at the date of this announcement, the closing price of the Existing Shares was HK$0.057, with a board lot size of 5,000, and the existing board lot value was only HK$285, which was less than HK$2,000. Upon the Share Consolidation becoming effective, based on the closing price of HK$0.057 per Existing Share as at the date of this announcement, the share price of the Company would be adjusted to HK$0.57 per Share. With a board lot size of 5,000, the theoretical market value of each board lot would be HK$2,850. The Share Consolidation will thus enable the Company to comply with the trading requirements under the Listing Rules. In view of the prevailing trading price of the Existing Shares of HK$0.057 as at the date of this announcement, and after weighting the potential benefits of the Share Consolidation on increasing the trading price per Share and the minimal expenses involved in the Share Consolidation, the Board proposes to implement the Share Consolidation and considers that it would be the most effective means to bring about a corresponding upward adjustment in the trading price of the Consolidated Shares on the Stock Exchange.

As at the date of this announcement, save for the proposed Rights Issue, the Company currently have no intention to carry out any corporate actions in the next twelve months, including share consolidation, share subdivision and change in board lot size, which would offset the effect of the Share Consolidation.

Furthermore, the Group has been actively reviewing from different levels and ways to enrich the development strategy of corporate sustainability and optimisation to create values. It is believed that the adjusted share price as a result of the Share Consolidation will enhance the corporate image of the Company so as to make investing in the Consolidated Shares more attractive to a broader range of investors, and the Board believes that this would be beneficial to the Company and the Shareholders as a whole.

In addition, the credit arising from the Capital Reduction will be transferred to the Contributed Surplus Account and following the Share Consolidation, the Board will be authorised to utilise credits in the Contributed Surplus Account in such manner as permissible under the Bye-laws and the Companies Act. In the event of the Board

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applying credit balance in the Contributed Surplus Account to set off against the accumulated losses of the Company, the Company’s capital and reserves will more closely reflect the available net assets of the Company and would give the Company a capital structure that should, subject to performance and availability of distributable reserves, permit the payment of dividends as and when the Board considers it appropriate in the future.

As at the date of this announcement, the Company does not has any concrete plan to conduct other corporate actions in the coming 12 months. Save for the proposed Rights Issue, the Company may consider to conduct other fund raising exercises as and when appropriate, details of which are disclosed in the section head ‘‘REASON FOR AND BENEFITS OF THE RIGHTS ISSUE AND USE OF PROCEEDS’’ in this announcement.

In view of the above, the Board considers that the Capital Reorganisation is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Shareholders and potential investors of the Company should note that the Capital Reorganisation is conditional upon satisfaction of conditions set out in the paragraph headed ‘‘Conditions of the Capital Reorganisation’’ above. Therefore, the Capital Reorganisation may or may not proceed. Shareholders and potential investors of the Company are advised to exercise caution when dealing in the securities of the Company, and if they are in any doubt about their position, they should consult their professional advisers.

BOARD LOT SIZE

Upon the Capital Reorganisation becoming effective, the board lot size of the New Shares for trading on the Stock Exchange will remain unchanged at 5,000 New Shares per board lot, which is the same board lot size for trading of the Existing Shares on the Stock Exchange.

OTHER ARRANGEMENT

Fractional entitlement to the New Shares

Fractional New Shares arising from the Capital Reorganisation, if any, will not be issued to the Shareholders. All entitlements to fractional New Shares will be aggregated and, if possible, sold for the benefits of the Company.

Shareholders concerned about losing out on any fractional entitlement are recommended to consult their licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser and may wish to consider the possibility of buying or selling Existing Shares in a number sufficient to make up an entitlement to receive a whole number of New Shares.

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Free exchange of share certificates

Subject to the Capital Reorganisation becoming effective, Shareholders may, on or after Wednesday, 1 September 2021 and until Monday, 11 October 2021 (both days inclusive), submit their share certificates for the Existing Shares to the Registrar at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong at the expense of the Company, to exchange for new share certificates of the New Shares (on the basis of 10 Existing Shares for 1 New Share). Thereafter, share certificates of the Existing Shares will be accepted for exchange only on payment of a fee of HK$2.50 (or such other amount as may from time to time be specified by the Stock Exchange) by the Shareholders for each share certificate for the Existing Shares submitted for cancellation or each new share certificate issued for the New Shares, whichever the number of certificates issued or cancelled is higher.

After 4: 10 p.m. on Thursday, 7 October 2021, existing share certificates for the Existing Shares will only remain effective as documents of title and may be exchanged for new share certificates for New Shares at any time but will not be accepted for delivery, trading and settlement purposes.

The new share certificates for the New Shares will be green in colour so as to distinguish them from the existing share certificates for the Existing Shares which are in blue colour.

Arrangement on odd lots trading

In order to facilitate the trading of odd lots (if any) of the New Shares, the Company will appoint a designated broker to arrange for matching service on a best effort basis regarding the sale and purchase of odd lots of the New Shares for a limited period of time. Shareholders should note that matching of the sale and purchase of odd lots of the New Shares is not guaranteed. Any Shareholder who is in any doubt about the odd lots arrangement is recommended to consult his/her/its own professional advisers. Further details in respect of the odd lots trading arrangement will be set out in the circular in relation to the Capital Reorganisation to be despatched to the Shareholders.

Adjustments in relation to the other securities of the Company

As at the date of this announcement, the Company does not have any share options, derivatives, options, warrants and conversion rights or other similar rights which are convertible or exchangeable into, any Existing Shares, Consolidated Shares or New Shares.

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(II) PROPOSED RIGHTS ISSUE

The Board proposes the Rights Issue, details of which are summarised below:

Rights Issue statistics

Basis of the Rights Issue : One (1) Rights Share for every two (2) New Shares held at the close of business on the Record Date Number of Shares in issue as : 3,721,561,225 Existing Shares at the date of this announcement Number of New Shares in : 372,156,122 New Shares (assuming that no further issue upon completion of Shares is issued or repurchased between the date of the Capital this announcement and the date on which the Capital Reorganisation Reorganisation becomes effective) Number of Rights Shares to : Up to 186,078,061 New Shares (assuming no change in be issued pursuant to the the number of Shares in issue on or before the Record Rights Issue Date and full subscription under the Rights Issue) Aggregate nominal value of : Up to HK$1,860,780.61 (assuming no change in the the Rights Shares number of Shares in issue on or before the Record Date and full subscription under the Rights Issue) Subscription Price : HK$0.40 per Rights Share Net price per Rights Share : Approximately HK$0.38 per Rights Share (i.e. Subscription Price less costs and expenses incurred in the Rights Issue) Total number of issued New : Up to 558,234,183 New Shares (assuming no change in Shares upon completion of the number of Shares in issue on or before the Record the Rights Issue and the Date and full subscription under the Rights Issue) Capital Reorganisation Gross proceeds from the : Up to HK$74,431,224.40 before expenses Rights Issue Right of excess applications : Qualifying Shareholders may apply for Rights Shares in excess of their provisional allotment

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As at the date of this announcement, the Company has no other outstanding derivatives, options, warrants or securities in issue which confer any rights to subscribe for, convert or exchange into Shares. Save for the purposes of the Capital Reorganisation, the Company shall not from the date of the Underwriting Agreement until after the Latest Time for Acceptance issue any Shares or issue or grant any options or other securities convertible into, exchangeable for or which carry rights to acquire any Shares.

Assuming there will not be any further issue of new Shares or repurchase of Shares on or before the Record Date, the 186,078,061 Rights Shares to be issued pursuant to the terms of the proposed Rights Issue represents 50.00% of the total number of issued New Shares immediately upon completion of the Capital Reorganisation and approximately 33.33% of the total number of issued New Shares as enlarged by the allotment and issue of the Rights Shares.

As at the date of this announcement, the Board has not received any information or other undertakings from any Shareholders of their intention to take up or not to take up the securities of the Company to be offered to them under the Rights Issue.

Subscription Price

The Subscription Price is HK$0.40 per Rights Share, payable in full upon acceptance of the relevant provisional allotment of Rights Shares and, where applicable, application for Excess Rights Shares under the Rights Issue or when a transferee of nil-paid Rights Shares applies for the Rights Shares.

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The Subscription Price represents:

(i) a discount of approximately 29.82% to the adjusted closing price of HK$0.57 per New Share (after taking into account the effect of the Capital Reorganisation), based on the closing price of HK$0.057 per Existing Share as quoted on the Stock Exchange on the Last Trading Day;
(ii) a discount of approximately 31.03% to the adjusted average closing price of HK$0.58 per New Share (after taking into account the effect of the Capital Reorganisation), based on the average closing price of HK$0.058 per Existing Share as quoted on the Stock Exchange for the last five consecutive trading days up to and including the Last Trading Day;
(iii) a discount of approximately 31.03% to the adjusted average closing price of approximately HK$0.58 per New Share (after taking into account the effect of the Capital Reorganisation), based on the average closing price of approximately HK$0.058 per Existing Share as quoted on the Stock Exchange for the last ten consecutive trading days up to and including the Last Trading Day;
(iv) a discount of approximately 21.57% to the theoretical ex-price of approximately HK$0.51 per New Share (after taking into account the effect of the Capital Reorganisation) after the Rights Issue, based on the closing price of HK$0.057 per Existing Share as quoted on the Stock Exchange on the Last Trading Day; and
(v) a theoretical dilution effect (as defined under Rule 7.27B of the Listing Rules) represented by a discount of approximately 10.34%, represented by the theoretical diluted price of approximately HK$0.52 per New Share (after taking into account the effect of the Capital Reorganisation) to the benchmarked price of approximately HK$0.58 per New Share (taking into account the closing price on the Last Trading Day of HK$0.057 per Existing Share and the average of the closing prices of the Existing Shares as quoted on the Stock Exchange for the five (5) previous consecutive trading days prior to the date of this announcement of approximately HK$0.058 per Existing Share and adjusted for the effect of the Capital Reorganisation).

In addition, for the information of the Shareholders and potential investors of the Company, the audited consolidated net liabilities as at 31 March 2021 per New Share (after taking into account the effect of the Capital Reorganisation) would be equal to approximately HK$1.45, calculated based on the Group’s audited consolidated net liabilities of HK$540,164,000 as at 31 March 2021 and the 372,156,122 New Shares (after taking into account the effect of the Capital Reorganisation) in issue.

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The Subscription Price was determined after arm’s length negotiation between the Company and the Underwriters with reference to, among others, (i) the market price of the Existing Shares under the prevailing market conditions; (ii) the financial position of the Group; and (iii) the reasons as discussed in the section headed ‘‘REASONS FOR AND BENEFITS OF THE RIGHTS ISSUE AND USE OF PROCEEDS’’ in this announcement. As all Qualifying Shareholders are provided with an equal opportunity to subscribe for their assured entitlements under the Rights Issue for the purpose of maintaining their respective existing shareholding interests in the Company, the Directors consider that the discount of the Subscription Price will encourage the Qualifying Shareholders to participate in the future growth of the Group. The Directors consider that the terms of the Rights Issue, including the Subscription Price, are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Status of the Rights Shares

The Rights Shares, when allotted, issued and fully paid, shall rank pari passu in all respects with the New Shares then in issue, including the right to receive all dividends and distributions which may be declared, made or paid with a record date which falls on or after the date of allotment of the Rights Shares in their fully-paid form.

Qualifying Shareholders

The Rights Issue will only be available to the Qualifying Shareholders and will not be available to the Excluded Shareholders. The Company will despatch the Prospectus Documents to the Qualifying Shareholders by no later than the Prospectus Posting Date and, to the extent reasonably practicable and legally permitted, will despatch the Prospectus only (without the PAL or the EAF) to the Excluded Shareholders for their information.

To qualify for the Rights Issue, a Shareholder:

(i) must be registered as a member of the Company at the close of business on the Record Date; and
(ii) is not an Excluded Shareholder.

Shareholders whose Shares are held by nominee companies should note that the Board will regard a nominee company as a single Shareholder according to the register of members of the Company. Shareholders with their Shares held by nominee companies are advised to consider whether they would like to arrange for registration of the relevant Shares in the name of the beneficial owner(s) prior to the Record Date.

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In order to be registered as members of the Company prior to the close of business on the Record Date so as to qualify for the Rights Issue, any transfer of Shares (together with the relevant Share certificates) must be lodged with the Registrar for registration by 4: 30 p.m. on Friday, 3 September 2021. The address of the Registrar, Tricor Secretaries Limited, is Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

It is expected that the last day of dealing in the New Shares on a cum-rights basis is Wednesday, 1 September 2021 and the New Shares will be dealt with on an ex-rights basis from Thursday, 2 September 2021. The latest time for acceptance of and payment for the Rights Shares is expected to be at 4: 00 p.m. on Tuesday, 28 September 2021.

Qualifying Shareholders who do not take up the Rights Shares to which they are entitled and Excluded Shareholders should note that their shareholdings in the Company will be diluted.

Closure of register of members

The register of members of the Company will be closed from Monday, 6 September 2021 to Friday, 10 September 2021, both days inclusive, for determining the Shareholders’ entitlements to the Rights Issue. No transfer of Shares will be registered during the above book closure period.

Rights of Overseas Shareholders

The Prospectus Documents to be issued in connection with the Rights Issue will not be registered or filed under the applicable securities legislation of any jurisdiction other than Hong Kong. Overseas Shareholders may not be eligible to take part in the Rights Issue as explained below.

The Directors will make enquiries as to the applicable securities legislation of the relevant overseas jurisdictions or the requirements of any relevant regulatory body or stock exchange in respect of extending the issue of the Rights Shares to Overseas Shareholders whose address on the register of members of the Company is in a place outside Hong Kong on the Record Date. If, after making such enquiries and having obtained legal advice in the relevant jurisdictions, the Directors are of the opinion that it would be necessary or expedient, on account either of the legal restrictions under the laws of the relevant jurisdiction or any requirement of the relevant regulatory body or stock exchange in that jurisdiction, not to offer the Rights Shares to such Overseas Shareholders, the Rights Issue will not be available to such Overseas Shareholders and no provisional allotment of the nil-paid Rights Shares or allotment of the Rights Shares will be made to them. The results of the enquiries and the basis of exclusion of the Overseas Shareholders will be included in the Prospectus.

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As at the date of this announcement, there are 7 Overseas Shareholders with registered addresses situated in the British Virgin Islands, Canada, Commonwealth of Australia, Taiwan, Kingdom of Belgium and the United States of America.

Arrangements will be made for the Rights Shares, which would otherwise have been provisionally allotted to the Excluded Shareholders, to be sold in the market as soon as practicable after the commencement of dealings on the Stock Exchange in Rights Shares in nil-paid form and in any event before the last day for dealing in the nil-paid Rights Shares if a premium (net of expenses) can be obtained. In the event that and to the extent that such nil-paid Rights Shares can be sold, the Company will then distribute such proceeds in Hong Kong dollars (after deducting the expenses of sale (if any)) to the Excluded Shareholders pro rata (but rounded down to the nearest cent) to their shareholdings on the Record Date, except that individual amount of HK$100 or less shall not be so distributed but shall be retained for the benefit of the Company.

Overseas Shareholders should note that they may or may not be entitled to the Rights Issue, subject to the results of enquiries made by the Directors pursuant to Rule 13.36(2)(a) of the Listing Rules. The Company reserves the right to treat as invalid any acceptance of or applications for Rights Shares where it believes that such acceptance or application would violate the applicable securities or other laws or regulations of any territory or jurisdiction. Accordingly, Overseas Shareholders should exercise caution when dealing in the Shares.

Basis of provisional allotments

The Company shall provisionally allot the Rights Shares to the Qualifying Shareholders at the Subscription Price, in the proportion of one (1) Rights Share for every two (2) New Shares held on the Record Date. Application for all or any part of a Qualifying Shareholder’s provisional allotment should be made by completing the PAL and lodging the same with a remittance for the Rights Shares being applied for with the Registrar on or before the Latest Time for Acceptance. Any holdings (or balance of holdings) of less than two (2) Shares will not entitle their holders to be provisionally allotted a Rights Share. Please refer to the arrangement as referred to in the paragraph headed ‘‘Fractional entitlements’’ below.

Fractional entitlements

In any event, fractions of the Rights Shares will not be provisionally allotted to any of the Qualifying Shareholders. Fractional entitlements will be rounded down to the nearest whole number of Rights Shares. Any Rights Shares created from the aggregation of fractions of the Rights Shares will be made available for excess application by the Qualifying Shareholders as described in the paragraph headed ‘‘Application for Excess Rights Shares’’ below. Should there be no excess application

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by the Qualifying Shareholders, those Rights Shares created from the aggregation of fraction of the Rights Shares may or may not be taken up by the Underwriters (or either of them, whichever shall be appropriate).

Application for Excess Rights Shares

The Company shall make the Excess Rights Shares available for subscription by the Qualifying Shareholders by means of EAF, and the Excess Rights Shares represent:

(i) any nil-paid Rights Shares provisionally allotted but not accepted by any of the Qualifying Shareholders or otherwise subscribed for by transferees of nil-paid Rights Shares prior to the Latest Time for Acceptance;
(ii) subject to the provisions of the Underwriting Agreement, any entitlements of the Excluded Shareholders provisionally allotted to a nominee of the Company which are left unsold;
(iii) any of the Rights Shares created from the aggregation of fractions of the Rights Shares; and
(iv) the Scale-down PAL Shares (if any) and the Scale-down EAF Shares (if any).

The Company will, upon consultation with the Underwriters, allocate the Excess Rights Shares (if any) at their discretion on a fair and equitable basis on the following principles:

(i) any Excess Rights Shares will be allocated to Qualifying Shareholders who apply for them on a pro rata basis by reference to the number of the Excess Rights Shares applied for;
(ii) reference will only be made to the number of Excess Rights Shares being applied for but no reference will be made to the Rights Shares comprised in applications by the PALs or the existing number of New Shares held by Qualifying Shareholders;
(iii) if the aggregate number of Rights Shares not taken up by the Qualifying Shareholders and/or transferees of nil-paid Rights Shares under the PALs is greater than the aggregate number of Excess Rights Shares applied for through the EAFs, the Company will allocate to each Qualifying Shareholder who applies for Excess Rights Shares in full application; and
(iv) no preference will be given to topping up odd lots to whole board lots.

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Shareholders with their Shares held by a nominee company (or which are deposited in CCASS) should note that the Board will regard such nominee company (including HKSCC Nominees Limited) as a single Shareholder according to the register of members of the Company. Accordingly, Shareholders should note that the aforesaid arrangement in relation to the allocation of the excess Rights Shares will not be extended to beneficial owners individually save and except for the beneficial owner(s) which the Company may permit in its absolute discretion. Shareholders with their Shares held by a nominee company (or which are deposited in CCASS) are advised to consider whether they would like to arrange for the registration of the relevant Shares in their own names on or prior to the Record Date for the purpose of the Rights Issue. Shareholders and investors of the Company should consult their professional advisors if they are in any doubt as to their status. Shareholders who would like to have their names registered on the register of members of the Company on the Record Date must lodge any transfers of Shares (together with the relevant Share certificates) with the Registrar for registration by no later than 4: 30 p.m. on Friday, 3 September 2021.

Share certificates of the Rights Shares and refund cheques for the Rights Issue

Subject to fulfillment of the conditions precedent of the Rights Issue, share certificates for the fully-paid Rights Shares are expected to be sent on or before Thursday, 7 October 2021 to those entitled thereto by ordinary post, at their own risk, to their registered addresses. If the Underwriting Agreement is terminated or not becoming unconditional, refund cheques will be despatched on or before Thursday, 7 October 2021 by ordinary post, at the respective Shareholders’ own risk, to their registered addresses. Refund cheques in respect of wholly or partially unsuccessful applications for Excess Rights Shares (if any) are expected to be posted on or before Thursday, 7 October 2021, by ordinary post to the applicants, at their own risk, to their registered addresses. Each Shareholder will receive one share certificates for all allotted Shares.

Scale-down of subscriptions to avoid the triggering of MGO Obligation and non-compliance of Public Float Requirement

Pursuant to the Underwriting Agreement and the Appointment (as defined in the section head ‘‘THE UNDERWRITING AGREEMENT’’ below) but subject to the Maximum Undertakings (as defined in the section head ‘‘THE UNDERWRITING AGREEMENT’’ below), as the Rights Issue is only underwritten by the Underwriters on a best effort basis, and so as to avoid the unwitting triggering of MGO Obligations and/or any non-compliance with Public Float Requirements, all applications for Rights Shares whether under the PAL(s) or the EAF(s), or by transferees of nil-paid Rights Shares, or by subscribers procured by the Underwriters (or either of them, whichever shall be appropriate) will be made on the basis that the applications are to be scaled-down by the Company to a level which (a) does not trigger an MGO Obligation on the part of the applicant or parties acting in concert

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with him/her/it; and/or (b) does not result in the non-compliance of the Public Float Requirement on the part of the Company. Any subscription monies for the Scaledown PAL Shares or the Scale-down EAF Shares will be refunded to the applicants, and the Scale-down PAL Shares and the Scale-down EAF Shares will be made available for subscription by other Qualifying Shareholders through the EAF(s).

In addition, under and/or pursuant to the Scaling-down, any application for Rights Shares, whether under PAL(s) or EAF(s), shall be subject to the scale-down mechanisms of the Rights Issue as determined by the Company to levels which do not trigger any MGO Obligation or non-compliance of Public Float Requirement. Such scale-down of applications of Rights Shares shall operate on a fair and equitable basis under the following principles: (a) EAF(s) should be scaled down before PAL(s); and (b) where the scale-down is necessitated by the exceeding of shareholding by a group rather than an individual Shareholder, the allocations of EAF(s) and PAL(s) to members of the affected group should be made on a pro rata basis by reference to the number of New Shares held by the affected applicants on the Record Date, but for avoidance of any doubt, any or any such onward allocation(s) shall be subject to the Scaling-down as well.

Taxation

Shareholders are advised to consult their professional advisers if they are in doubt as to the taxation implications of the receipt, purchase, holding, exercising, disposing of or dealing in, the nil-paid Rights Shares or the fully-paid Rights Shares and, regarding Overseas Shareholders, their receipt of the net proceeds, if any, from sales of the nil-paid Rights Shares on their behalf.

Application for listing

The Company will apply to the Listing Committee of the Stock Exchange for the listing of, and the permission to deal in, the Rights Shares (in both nil-paid and fullypaid forms) to be issued and allotted pursuant to the Rights Issue. The nil-paid and fully-paid Rights Shares will be traded in the board lots of 5,000 Shares. No part of the securities of the Company is listed or dealt in or on which listing or permission to deal is being or is proposed to be sought on any other stock exchange.

Subject to the granting of the listing of, and the permission to deal in, the Rights Shares (in both their nil-paid and fully-paid forms) on the Stock Exchange as well as compliance with the stock admission requirements of HKSCC, the Rights Shares (in both their nil-paid and fully-paid forms) will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the respective commencement dates of dealings in the Rights Shares (in both their nilpaid and fully-paid forms) on the Stock Exchange, or such other dates as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange

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on any trading day is required to take place in CCASS on the second settlement day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

Shareholders should seek advice from their licensed securities dealer(s) or other professional adviser(s) for details of those settlement arrangements and how such arrangements will affect their rights and interests if they are in any doubt.

Dealings in the Rights Shares (in both their nil-paid and fully-paid forms) will be subject to the payment of stamp duty, Stock Exchange trading fee, SFC transaction levy or any other applicable fees and charges in Hong Kong.

THE UNDERWRITING AGREEMENT

On 14 July 2021 (after trading hours), the Company and the Underwriters (each a ‘‘Party’’ and collectively, the ‘‘Parties’’) entered into the Underwriting Agreement in relation to the underwriting and respective arrangements in respect of the Rights Issue.

The Rights Issue is only underwritten by the Underwriters on best effort basis, and the Company irrevocably appoints the Underwriters to conduct the Rights Issue in accordance with the Underwriting Agreement, with the First Underwriter underwriting up to 93,039,031 Rights Shares on best effort basis (the ‘‘First Undertaking’’) and the Second Underwriter underwriting up to 93,039,030 Rights Shares on best effort basis (the ‘‘Second Undertaking’’), though the Underwriters may, subject to having obtained the Company’s prior written approval, agree with each other from time to time prior to the Latest Time for Acceptance to vary (or further vary, whichever shall be appropriate) the First Undertaking and the Second Undertaking to which they are respectively subject to such an extent that eventually, the First Underwriter shall underwrite more than 93,039,031 Rights Shares while the Second Underwriter shall underwrite less than 93,039,030 Rights Shares, or alternatively, the First Underwriter shall underwrite less than 93,039,031 Rights Shares while the Second Underwriter shall underwrite more than 93,039,030 Rights Shares provided that the total number of Underwritten Shares shall not exceed 186,078,061 (the ‘‘Maximum Undertakings’’), and the Underwriters shall rank pari passu with each other, and neither the First Underwriter nor the Second Underwriter shall be any lead underwriter for or with respect to the Rights Issue (collectively, the ‘‘Appointment’’). Subject to the Maximum Undertakings, the First Underwriter shall not be responsible for or accountable to the Company or any other party such part of the Rights Issue and/or such portfolio of the Rights Shares for which the Second Underwriter shall be responsible under or pursuant to the Underwriting Agreement and the Appointment, and likewise, the Second Underwriter shall not be responsible for or accountable to the Company or any other party such part of the Rights Issue and/or such portfolio of the Rights Shares for which the First Underwriter shall be responsible under or pursuant to the Underwriting Agreement and the Appointment.

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The terms of the Underwriting Agreement are summarised as below.

Underwriting Agreement

Date : 14 July 2021 (after trading hours) Issuer : The Company First Underwriter : Kingkey Securities Group Limited, a licensed corporation carrying out type 1 (dealing in securities) and type 4 (advising on securities) regulated activities under the SFO and its ordinary course of business includes underwriting of securities.

As at the date of this announcement, the First Underwriter does not hold any Shares. The First Underwriter and its ultimate beneficial owners are, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, third parties independent of and not connected with the Company and its connected persons. The First Underwriter confirmed that it has complied with Rule 7.19(1)(a) of the Listing Rules.

Second Underwriter : Koala Securities Limited, a licensed corporation carrying out type 1 (dealing in securities) and type 4 (advising on securities) regulated activities under the SFO and its ordinary course of business includes underwriting of securities.

As at the date of this announcement, the Second Underwriter does not hold any Shares. The Second Underwriter and its ultimate beneficial owners are, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, third parties independent of and not connected with the Company and its connected persons. The Second Underwriter confirmed that it has complied with Rule 7.19(1)(a) of the Listing Rules.

Number of Rights : up to 186,078,061 Rights Shares underwritten by the Shares underwritten Underwriters on a best effort basis pursuant to the terms by the Underwriters and conditions of the Underwriting Agreement.
Underwriting : to each underwriter, an underwriting commission which Commission shall be in such amount equivalent to 3.5% of the Relevant Proceeds.

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The terms of the Underwriting Agreement (including the commission rate) were determined after arm’s length negotiation between the Company and the Underwriters by reference to the financial position of the Group, the size of the Rights Issue, the current and expected market condition, the market price of the Company and the prevailing underwriting commission of the market. The Directors consider that the terms of the Underwriting Agreement (including the commission rate) are fair and reasonable so far as the Company and the Shareholders as a whole are concerned. None of the Directors has a material interest in the transaction contemplated under the Underwriting Agreement.

Termination of the Underwriting Agreement

If, prior to the Latest Time for Termination:

(i) in the joint absolute opinion of the Underwriters, the success of the Rights Issue would be materially and adversely affected by:
(a) the introduction of any new law or regulation or any change in existing law or regulation (or the judicial interpretation thereof) or other occurrence of any nature whatsoever which may in the joint absolute opinion of the Underwriters materially and adversely affects the business or the financial or trading position or prospects of the Group as a whole or is materially adverse in the context of the Rights Issue; or
(b) the occurrence of any local, national or international event or change (whether or not forming part of a series of events or changes occurring or continuing before, and/or after the date of the Underwriting Agreement) of a political, military, financial, economic or other nature (whether or not ejusdem generis with any of the foregoing), or in the nature of any local, national or international outbreak or escalation of hostilities or armed conflict, or affecting local securities markets which may, in the joint absolute opinion of the Underwriters materially and adversely affects the business or the financial or trading position or prospects of the Group as a whole or materially and adversely prejudice the success of the Rights Issue or otherwise makes it inexpedient or inadvisable to proceed with the Rights Issue; or
(ii) any adverse change in market conditions (including without limitation, any change in fiscal or monetary policy, or foreign exchange or currency markets, suspension or material restriction on trading in securities) occurs which in the joint opinion of the Underwriters and the Company is likely to materially or adversely affect the success of the Rights Issue or otherwise makes it inexpedient or inadvisable to proceed with the Rights Issue; or

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(iii) there is any change in the circumstances of the Company or any member of the Group which in the joint absolute opinion of the Underwriters will adversely affect the prospects of the Company, including, without limiting the generality of the foregoing, the presentation of a petition or the passing of a resolution for the liquidation or winding up or similar event occurring in respect of any of member of the Group or the destruction of any material asset of the Group; or
(iv) any event of force majeure including, without limiting the generality thereof, any act of God, war, riot, public disorder, civil commotion or unrest, fire, flood, explosion, epidemic, pandemic, terrorism, strike or lock-out which would, in the joint absolute opinion of the Underwriters materially and adversely affects the business or the financial or trading position or prospects of the Group as a whole; or
(v) in the joint absolute opinion of the Underwriters, there occurs any other material adverse change in relation to the business or the financial or trading position or prospects of the Group as a whole whether or not ejusdem generis with any of the foregoing; or
(vi) any matter which, had it arisen or been discovered immediately before the Prospectus Posting Date and not having been disclosed in the Prospectus Documents, would have constituted, in the joint absolute opinion of the Underwriters, a material omission in the context of the Rights Issue; or
(vii) any suspension in the trading of securities generally or the Company’s securities on the Stock Exchange for a period of more than twenty (20) consecutive trading days otherwise than due to or in connection with or in relation to the Underwriting Agreement and/or the Rights Issue and excluding any suspension in connection with the clearance of this announcement or other matters in connection with the Underwriting Agreement and/or the Rights Issue; or
(viii) the Prospectus Documents when published contains information (either as to business prospects or the condition of the Group or as to its compliance with any laws or the Listing Rules or any applicable regulations) which has not prior to the date of the Underwriting Agreement been publicly announced or published by the Company and which may in the joint absolute opinion of the Underwriters be material to the Group as a whole upon completion of the Rights Issue and is likely to affect materially and adversely the success of the Rights Issue,

the Underwriters shall be entitled to jointly terminate the Underwriting Agreement by joint notice in writing served on the Company on or prior to the Latest Time for Termination (the ‘‘Termination Notice’’). For the avoidance of any doubt, even if the Underwriters, in their respective sole and absolute opinion considers any COVID-19 related event to have caused a material adverse impact over the implementation of the

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Underwriting Agreement or the Rights Issue, they shall not be entitled to rely on such impact or its aftermath thereof as ground or reason to terminate or rescind the Underwriting Agreement and/or the Rights Issue.

If the Underwriters terminate the Underwriting Agreement, the Rights Issue will not proceed. A further announcement would be made by the Company if the Underwriting Agreement is terminated by the Underwriters.

Conditions precedent of the Rights Issue

Completion of the Rights Issue and effectuating the Appointment under and pursuant to the Underwriting Agreement are conditional upon:

(i) the Capital Reorganisation having been completed with the New Shares having been issued and allotted to holders of Existing Shares and other parties who are so entitled (if any);
(ii) the Company having delivered to the Stock Exchange for authorisation and having registered with the Companies Registry respectively one copy each of the Prospectus Documents duly signed and certified by two Directors (or by their agents duly authorised in writing) as having been approved by resolution of the Directors (and all other documents required to be attached thereto) and otherwise in compliance with the Listing Rules and the Companies (WUMP) Ordinance not later than the Prospectus Posting Date;
(iii) the posting of the Prospectus Documents to the Qualifying Shareholders and the posting of the Prospectus and a letter in the agreed form to the Excluded Shareholders, if any, for information purpose only explaining the circumstances in which they are not permitted to participate in the Rights Issue on or before the Prospectus Posting Date;
(iv) the Listing Committee having granted, and not having revoked or withdrawn, the listing of and permission to deal in the Rights Shares in both their nil-paid and fullypaid forms either unconditionally or subject to such conditions which the Underwriters jointly accept and the satisfaction of such conditions (if any and where relevant) by no later than the Prospectus Posting Date;
(v) the obligations of the Underwriters having become unconditional and the Underwriting Agreement not having been terminated in accordance with its terms;
(vi) the Company having complied with and performed all its functions, undertakings and obligations in and under the Underwriting Agreement as well as the representations and warranties of the Company in and under the Underwriting Agreement;
(vii) the Company having complied with all applicable laws and regulations;

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(viii) each Party having obtained all necessary consent and/or approval for entering into the Underwriting Agreement or the transactions contemplated therein;
(ix) the entering into of binding agreements by the Underwriters (or either of them, whichever shall be appropriate) with certain subscriber(s) procured by the Underwriters (or either of them, whichever shall be appropriate) and/or subunderwriter(s), which shall be Independent Third Parties, for placing and/or subunderwriting the Rights Shares, such that neither the Underwriters (or either of them, whichever shall be appropriate) nor any of the subscriber(s) procured by the Underwriters (or either of them, whichever shall be appropriate) and/or subunderwriter(s) and/or party or parties acting in concert (having the meaning as set out in the Takeovers Code) with the respective subscribers or any of the connected persons or associates of the respective subscribers shall be interested in 30% or more of the issued share capital of the Company as enlarged by the Rights Issue;
(x) each condition to enable the Rights Shares in their nil-paid or fully-paid forms to be admitted as eligible securities for deposit, clearance and settlement in CCASS having been satisfied on or before the Business Day prior to the commencement of trading of the Rights Shares (in their nil-paid and fully-paid forms, respectively) and no notification having been received by the Company from the HKSCC by such time that such admission or facility for holding and settlement has been or is to be refused;
(xi) there being no Specified Event occurring on or before the Latest Time for Termination; and
(xii) the Underwriters having received from the Company all the documents as set out in the Underwriting Agreement in such form and substance satisfactory to the Underwriters as soon as practicable after the date of the Underwriting Agreement, and not later than 4: 00 p.m. on the Business Day immediately before the Prospectus Posting Date.

Apart from the conditions precedent as set out in (vi) and (xii) above which can be waived in whole or in part by the Underwriters jointly (but not severally, and in any event, none of the conditions precedent above can be waived by the Company whatsoever) by notice in writing to the Company prior to the Latest Time for Termination, all other conditions precedent are incapable of being waived by any Party. The Parties shall use their respective best endeavours to procure the satisfaction and/or fulfilment of all the conditions precedent (save and except such conditions precedent which have been waived by the Underwriters jointly in accordance with the foregoing provisions of this paragraph) by the Latest Time for Termination or such other date as the Parties may agree in writing and in particular, the Company shall furnish such information, supply such documents, pay such fees, give such undertakings and do all

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such acts and things as may be necessary in connection with the listing of the Rights Shares (in their nil-paid or fully-paid forms) or to give effect to the Rights Issue and the arrangements contemplated in or under the Underwriting Agreement.

If any of the conditions precedent (save and except such conditions precedent which have been waived by the Underwriters jointly in accordance with the above paragraph) are not satisfied in whole by the Latest Time for Termination or such other date as the Parties may agree in writing, the Underwriting Agreement shall terminate (save and except the clauses of fees and expenses, indemnity and certain clauses which shall remain in full force and effect) and no Party shall have any claim against the other Parties for costs, damages, compensation or otherwise save for any antecedent breaches.

REASONS FOR AND BENEFITS OF THE RIGHTS ISSUE AND USE OF PROCEEDS

The Group is principally engaged in multi-media technologies business, gamma ray services, tourism and hospitality business and other operations — securities trading and investment.

As disclosed in the announcement of the Company dated 30 June 2021 in relation to the annual results of the Company for the year ended 31 March 2021, the bank and other borrowings of the Company amounted to HK$297,244,000 which are current liabilities to be expiring within 1 years from 31 March 2021. The Company also recorded net liabilities of HK$540,164,000 as at 31 March 2021.

Given the imminent need of funds to settle the outstanding liabilities owing by the Company to its creditors, as well as to maintain its operations, the Board considers that the Rights Issue will provide a good opportunity for the Company to raise funds to strengthen its capital base and improve its financial position, and also allow all outstanding Shareholders to maintain their proportional shareholdings in the Company.

The Board has considered other fund raising alternatives before resolving to the Rights Issue, including but not limited to debt financing and equity financing. However, debt financing will put further pressure on the financial position of the Group, and will result in additional interest burden, higher gearing ratio of the Group and subject the Group to repayment obligations. Also, due to the financial position of net liabilities of the Company, it might be hard to get a reasonable terms of loan offered by financial institutions.

The Board considers that using the form of equity is a better alternative than debt financing as it would not result in additional interest burden and will improve the gearing of the Group. The Board considers that placing or subscription of new Shares or convertible securities will dilute the shareholding of the existing Shareholders without

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giving the chance to the existing Shareholders to participate, and placees or subscribers might require a higher discount on issue price as a result of the current financial position of the Company.

Having considered the above factors, the Board considers that Rights Issue is preemptive in nature, which allows the Group to improve its liquidity and capital base while mitigate dilution effect to the existing Shareholders. Qualifying Shareholders can maintain their proportional shareholdings in the Company through participation in the Rights Issue. The Rights Issue also allows the Qualifying Shareholders to (a) increase their respective shareholding in the Company by acquiring additional rights entitlement in the open market (subject to the availability) and through excess applications; or (b) reduce their respective shareholding in the Company by disposing of their rights entitlements in the open market (subject to the market demand). Also, compared to an open offer, the Rights Issue allows the trading of rights entitlements. Further, the Rights Issue will enable the Group to strengthen its capital base and to enhance its financial position without increasing its debt or finance costs.

As the Rights Issue is underwritten on a best effort basis, there is no assurance of the minimum level of acceptances. Nevertheless, after discussing with the Underwriters, they are confident to do their best in underwriting the Rights Shares under the current market conditions if there is no material adverse change in the economic condition.

Assuming there will be full subscription under the Rights Issue, the gross proceeds from the Rights Issue will be up to approximately HK$74.43 million. The net proceeds from the Rights Issue, after deducting professional fees and all other relevant expenses, are estimated to be not more than approximately HK$70 million. Assuming the net proceeds from the Rights Issue will amount to approximately HK$70 million, the Company intends to apply such net proceeds as to approximately (i) 20% (approximately HK$14 million) of net proceeds for the reimbursement for trade and other payables accounts, in particular with regard to long-term outstanding payables; (ii) 10% (approximately HK$7 million) of net proceeds for the payment for the annual license fee for train media platform; (iii) 50% (approximately HK$35 million) of net proceeds for the repayment for bank and other borrowings, in particular to settle the borrowings with close maturity date and relatively high finance costs; and (iv) the remaining 20% (approximately HK$14 million) of net proceeds for the Group’s general working capital (including but not limited to (a) the operating cashflow for business collaboration with Chun Mian Network Technology (Shanghai) Co., Ltd. (as disclosed in the announcement of the Company dated 8 June 2021) to expand its scale of convergence media business; and (b) payment for daily operating expenses such as rental, salaries, legal and professional expenses). In the event that there is an under-subscription of the Rights Issue, the net proceeds of the Rights Issue will be utilised in proportion to the above uses.

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Set out below is the list of the Group’s outstanding debt as at 31 March 2021 and the proposed means of settlement:

Amount due/to
Nature be due Maturity date Proposed means of settlement HK$(’000)
Approximately
i) Loan from Chongqing Short-term loan 148,292 27 March 2019 Debt capitalisation (terms Tongnan Government and and settlement details to interest payable be discussed with Chongqing Tongnan Government)
ii) Loan from third parties Short-term loan 35,000 Within the next Proceeds of approximately (Note 1) 6 months HK$35 million from Rights Issue (Note 2)
iii) Loan from other third Short-term loan 113,952 Within the next Extension of repayment date parties 12 months / debt capitalisation (terms and settlement details to be discussed with creditors)
iv) Amount due to shareholders Short-term loan 80,829 Not specified Debt capitalisation (terms and directors and settlement details to be discussed with the shareholders and directors)
v) Convertible Loan Long-term loan 10,442 By the end of third Fund raising from other quarter of 2022 fund raising activities in the coming 12 months

Notes:

Loans which will be due in the coming 6 months or with relatively high finance costs.
In the event that the Rights Issue is under-subscribed and the repayment of HK$35 million is insufficient, the Company will seek extension of the loans from its lenders or discuss with the lenders on debt capitalisation.

As disclosed in the announcement of the Company dated 1 April 2021, the Company planned to conduct a rights issue with the gross proceeds for about HK$298 million. Accordingly, the Company has approached various financial institutions in relation to the underwriting of fund raising exercise. In light of the uncertainty of COVID-19 pandemic, most of the underwriters generally adopt a more conservative strategy in the underwriting business. After discussion, two of the underwriters have expressed their interest and are willing to accept the underwriting arrangement, and the terms and

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conditions as set out in the Underwriting Agreement. The Company will continue and use its best endeavours to look for other fund raising opportunities including debt financing and equity financing in the coming twelve months. Save for the proposed Rights Issue, the Company does not have any concrete plan in relation to any form of fund raising exercise as at the date of this announcement.

The expenses in relation to the Rights Issue (including the underwriting commission, financial advisory fee, printing, translation, registration, legal, accounting, levy, and documentation charges) are estimated to be approximately HK$4.43 million.

In light of the above, the Board is of the view that the terms of the Underwriting Agreement are fair and reasonable and the Rights Issue is in the interests of the Company and the Shareholders as a whole.

WARNING OF THE RISKS OF DEALING IN THE EXISTING SHARES AND NIL-PAID RIGHTS SHARES

Shareholders and potential investors of the Company should note that the proposed Rights Issue is conditional upon, among others, the Underwriting Agreement having become unconditional and the Underwriters not having terminated the Underwriting Agreement in accordance with the terms thereof (a summary of which is set out in the paragraph headed ‘‘Conditions Precedent of the Rights Issue’’ and ‘‘Termination of the Underwriting Agreement’’ in this announcement). Accordingly, the Rights Issue may or may not proceed.

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EFFECTS ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

For illustration purposes only, set out below is the shareholding structure of the Company (i) as at the date of this announcement; (ii) immediately after the Capital Reorganisation becoming effective but before completion of the Rights Issue; (iii) after the Capital Reorganisation becoming effective and immediately after completion of the Rights Issue (assuming all Qualifying Shareholders have taken up the Rights Shares); and (iv) after the Capital Reorganisation becoming effective and immediately after completion of the Rights Issue (assuming none of the Qualifying Shareholders have taken up the Rights Shares):

Directors Zhang Yi (Note 1) Lam Sze Man (Note 2) Chan Kee Huen, Michael (Note 2) Public Shareholders The Underwriter and/or subscriber(s) procure by it Other public Shareholders Total	(i) As at the date of Number of Shares 215,427,500 277,500 25,000 — 3,505,831,225 3,721,561,225	this announcement Approximate % 5.7886% 0.0075% 0.0007% — 94.2032% 100.0000%	(ii) Immediately af Reorganisation becoming completion of the Number of Shares 21,542,750 27,750 2,500 — 350,583,122 372,156,122	ter the Capital effective but before Rights Issue Approximate % 5.7886% 0.0075% 0.0007% — 94.2032% 100.0000%	(iii) After the Capital Reorganisation becoming effective and immediately after completion of the Rights Issue (assuming all Qualifying Shareholders have taken up the Rights Shares) Number of Shares Approximate % 32,314,125 5.7886% 41,625 0.0075% 3,750 0.0007% — — 525,874,683 94.2032% 558,234,183 100.0000%	(iv) After the Capital Reorganisation becoming effective and immediately after completion of the Rights Issue (assuming none of the Qualifying Shareholders have taken up the Rights Shares) Number of Shares Approximate % 21,542,750 3.8591% 27,750 0.0050% 2,500 0.0004% 186,078,061 33.3333% 350,583,122 62.8022% 558,234,183 100.0000%	(iv) After the Capital Reorganisation becoming effective and immediately after completion of the Rights Issue (assuming none of the Qualifying Shareholders have taken up the Rights Shares) Number of Shares Approximate % 21,542,750 3.8591% 27,750 0.0050% 2,500 0.0004% 186,078,061 33.3333% 350,583,122 62.8022% 558,234,183 100.0000%
							100.0000%

Notes:

80,000 Shares are beneficially owned by Mr. Zhang Yi, the executive Director, and 215,347,500 Shares are beneficially owned by One Faith Investments Limited, which is beneficially and wholly owned by Mr. Zhang Yi.
Ms. Lam Sze Man is the executive Director, and Mr. Chan Kee Huen, Michael is the independent non-executive Director.

In the event of the Underwriters (or either of them, whichever shall be appropriate) being called upon to subscribe for or procure subscription for the Untaken Shares pursuant to the Underwriting Agreement and the Appointment but subject to the Maximum Undertakings, the Underwriters (or the Underwriter concerned, whichever shall be appropriate) shall confirm with the Company the actual number of Untaken Shares as at the Latest Time for Acceptance, and shall procure for subscription therefor on best effort basis whilst using its best endeavours to ensure that (1) each of the subscribers of the Untaken Shares procured by the Underwriters (or the Underwriter concerned, whichever shall be appropriate) shall be an Independent Third Party and not connected with the Company, any of the Directors or chief executive or substantial Shareholders or their respective associates; (2) the Public Float Requirements be fulfilled by the Company

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upon completion of the Rights Issue; and (3) the Underwriters (or the Underwriter concerned, whichever shall be appropriate) or each subscriber procured by the Underwriters (or the Underwriter concerned, whichever shall be appropriate) (together with parties acting in concert with the respective subscribers or any of the connected persons or associates of the respective subscribers) shall not hold in aggregate 30% or more of the voting rights of the Company immediately after the Rights Issue.

EQUITY FUND RAISING ACTIVITIES OF THE COMPANY IN THE PAST TWELVE MONTHS

The Company has not conducted any equity fund raising activity in the past twelve months immediately preceding the date of this announcement.

EXPECTED TIMETABLE

The expected timetable for the implementation of the Capital Reorganisation and the Rights Issue is set out below. All times and dates in this timetable refer to Hong Kong local times and dates. This timetable is for indicative purpose only and may be varied due to additional time required for compliance with regulatory requirements in Bermuda or otherwise. Any subsequent changes to the expected timetable will be announced by the Company as and when appropriate.

Event

Time and Date 2021

Publication of the announcement

Wednesday, 14 July

Despatch of Company’s circular in relation to the Capital Thursday, 5 August Reorganisation to the Shareholders together with notice of SGM and proxy form for SGM
Latest time for lodging transfer documents of the Shares 4: 30 p.m. on to qualify for attendance and voting at the SGM Tuesday, 24 August
Closure of register of members of the Company for determining the identity of the Shareholders entitled to attend and vote at the SGM (both days inclusive)

Latest time for lodging proxy forms for the SGM

Wednesday, 25 August to Monday, 30 August 2: 00 p.m. on Saturday, 28 August

Expected date and time of the SGM to approve the Capital Reorganisation

2: 00 p.m. on Monday, 30 August

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Time and Date 2021

Event

Announcement of the poll results of the SGM	Monday, 30 August
Effective date for the Capital Reorganisation	Wednesday,1 September
First day for free exchange of existing share certificates	Wednesday, 1 September
for new share certificates for the New Shares
Dealing in New Shares commences	9: 00 a.m. on
	Wednesday, 1 September
Original counter for trading in the Shares in existing share	9: 00 a.m. on
certificates in board lots of 5,000 Shares temporarily	Wednesday, 1 September
closes
Temporary counter for trading in the New Shares in	9: 00 a.m. on
board lots of 500 New Shares (in the form of existing	Wednesday, 1 September
share certificates) opens
Last day of dealings in the New Shares on a cum-rights	Wednesday, 1 September
basis relating to the Rights Issue
First day of dealings in New Shares on an ex-rights basis	Thursday, 2 September
relating to the Rights Issue
Latest time for the Shareholders to lodge transfer	4: 30 p.m. on
documents of New Shares in order to be qualified for	Friday, 3 September
the Rights Issue
Closure of register of members to determine the eligibility	Monday, 6 September to
of the Rights Issue (both days inclusive)	Friday, 10 September
Record Date to determine entitlements under the Rights	Friday, 10 September
Issue
Register of members of the Company re-opens	Monday, 13 September
Despatch of the Prospectus Documents (including the	Monday, 13 September
PAL, the EAF and the Prospectus) (in case of the
Excluded Shareholders, the Prospectus only)

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Time and Date 2021

Event

First day of dealings in nil-paid Rights Share Original counter for trading in New Shares in board lots of 5,000 New Shares (in the form of new share certificates) re-opens

Parallel trading in New Shares (in the form of new share certificates and existing share certificates) commences
Designated broker starts to stand in the market to provide matching services for odd lots of the New Shares

Latest time for splitting of PALs

Last day of dealing in nil-paid Rights Shares
Latest time for acceptance of and payment for the Rights Shares and application for and payment for Excess Rights Shares
Latest time to terminate the Underwriting Agreement and for the Rights Issue to become unconditional

Announcement of results of the Rights Issue

Temporary counter for trading in New Shares in board lots of 500 New Shares (in the form of existing share certificates) closes
Parallel trading in New Shares (in the form of new share certificates and existing share certificates) ends
Despatch of share certificates for fully-paid Rights Shares
Despatch of refund cheques, if any, for wholly or partially unsuccessful excess applications or if the Rights Issue is terminated

9: 00 a.m. on Wednesday, 15 September 9: 00 a.m. on Wednesday, 15 September

9: 00 a.m. on Wednesday, 15 September 9: 00 a.m. on Wednesday, 15 September 4: 30 p.m. on Friday, 17 September Thursday, 23 September

4: 00 p.m. on Tuesday, 28 September

4: 00 p.m. on Wednesday, 29 September Wednesday, 6 October

4: 10 p.m. on Thursday, 7 October

4: 10 p.m. on Thursday 7 October

Thursday, 7 October Thursday, 7 October

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Time and Date 2021

Event

Commencement of dealings in fully-paid Rights Shares

Last day for free exchange of existing share certificates for new share certificates for the New Shares

9: 00 a.m. on Friday, 8 October Monday, 11 October

Designated broker ceases to provide matching services for odd lots of the New Shares

4: 00 p.m. on Friday, 29 October

EFFECT OF BAD WEATHER OR EXTREME CONDITIONS ON THE LATEST TIME FOR ACCEPTANCE OF AND PAYMENT FOR THE RIGHTS SHARES AND APPLICATION FOR AND PAYMENT FOR EXCESS RIGHTS SHARES

Whenever any part of the expected timetable of the Rights Issue as enlisted in the provisions of the Underwriting Agreement may be interrupted by a typhoon, a black rainstorm warning or Extreme Conditions, the Company shall properly inform the Shareholders of the corresponding contingency arrangements, which contingency arrangements shall include the Latest Time for Acceptance not taking place on the time as scheduled:

(a) if a tropical cyclone warning signal no. 8 or above, a black rainstorm warning and/or Extreme Conditions is in force in Hong Kong at any local time before 12: 00 noon but no longer in force after 12: 00 noon on the day on which the Latest Time for Acceptance is initially scheduled to fall, the Latest Time for Acceptance be extended to 5: 00 p.m. on the same Business Day; or
(b) if a tropical cyclone warning signal no. 8 or above, a black rainstorm warning and/or Extreme Conditions is in force in Hong Kong at any local time between 12: 00 noon and 4: 00 p.m. on the day on which the Latest Time for Acceptance is initially scheduled to fall, the Latest Time for Acceptance be extended to 4: 00 p.m. on the following Business Day which does not have either of those warnings in force in Hong Kong at any time between 9: 00 a.m. and 4: 00 p.m.

If the Latest Time for Acceptance does not take place on or before 4: 00 p.m. on Tuesday, 28 September 2021, the dates mentioned herein may be affected. The Company will notify the Shareholders by way of announcement(s) on any change to the expected timetable of the Rights Issue as soon as practicable.

LISTING RULES IMPLICATIONS

The Capital Reorganisation is subject to, among other things, the passing of a special resolution by the Shareholders approving the same at the SGM.

– 35 –

GENERAL

DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms shall have the following meanings:

‘‘acting in concert’’ having the meaning as set out in the Takeovers Code
‘‘associate(s)’’ the meaning attributed to it under the Listing Rules
‘‘Board’’ the board of Directors
‘‘Business Day’’ any day (other than a Saturday, Sunday or public holiday or a day on which a typhoon signal no. 8 or above or black rainstorm signal is hoisted or the Extreme Conditions is announced in Hong Kong between 9: 00 a.m. to 5: 00 p.m.) on which licensed banks in Hong Kong are generally open for business throughout their normal business hours
‘‘Bye-laws’’ the bye-laws of the Company

– 36 –

‘‘Capital Reduction’’ the proposed reduction in the issued share capital of the Company through cancellation of the paid up capital of the Company to the extent of HK$0.99 on each of the issued Consolidated Shares such that the par value of each issued Consolidated Share will be reduced from HK$1.00 to HK$0.01 and cancellation of fractional Consolidated Share as detailed in the section headed ‘‘PROPOSED CAPITAL REORGANISATION’’ of this announcement
‘‘Capital Reorganisation’’
the proposed capital reorganisation of the share capital of the Company involving the Share Consolidation, the Capital Reduction, the Share Subdivision and the transfer of the credit arising from the Capital Reduction to the Contributed Surplus Account
‘‘CCASS’’ the Central Clearing and Settlement System established and operated by HKSCC
‘‘Companies Act’’ the Companies Act 1981 of Bermuda (as amended from time to time)
‘‘Companies the Companies (Winding Up and Miscellaneous Provisions) (WUMP) Ordinance, Chapter 32 of the Laws of Hong Kong (as amended Ordnance’’ from time to time)
‘‘Company’’
China Baoli Technologies Holdings Limited, a company incorporated in Bermuda with limited liability, the issued Shares of which are listed on the Stock Exchange (Stock Code: 164)
‘‘connected shall have the meaning ascribed to it in the Listing Rules person(s)’’
‘‘Consolidated Share(s)
ordinary share(s) of par value of HK$1.00 each in the share capital of the Company immediately after the Share Consolidation becoming effective but before the Capital Reduction
‘‘Contributed Surplus the contributed surplus account of the Company Account’’
‘‘Director(s)’’
the director(s) of the Company for the time being
‘‘EAF(s)’’
the form(s) of application for Excess Rights Shares in the agreed form for use by such Qualifying Shareholders who wish to apply for any Excess Rights Shares

– 37 –

‘‘Excess Rights Share(s)’’
any nil-paid Rights Share(s) provisionally allotted but not accepted by any of the Qualifying Shareholders or otherwise subscribed for by transferees of nil-paid Rights Shares prior to the Latest Time for Acceptance, any entitlements of the Excluded Shareholders provisionally allotted to a nominee of the Company which are left unsold, and shall include any of the Rights Shares created from the aggregation of fractions of the Rights Shares and the Scale-down PAL Shares (if any) and the Scale-down EAF Shares (if any)
‘‘Excluded Shareholder(s)’’
those Overseas Shareholders whose address is/are in such place(s) outside Hong Kong where the Directors, consider it being necessary or expedient on account of either of the legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place, to whom the Directors decide not to offer the Rights Shares
‘‘Existing Share(s)’’ ordinary share(s) of par value of HK$0.10 each in the share capital of the Company prior to the Capital Reorganisation becoming effective
‘‘Extreme the extreme conditions as announced by any Hong Kong Conditions’’ Government department or body or otherwise, whether or not under or pursuant to the revised ‘‘Code of Practice in Times of Typhoons and Rainstorms’’ issued by the Labour Department in June 2019 in the event of serious disruption of public transport services, or government services, extensive flooding, major landslides or large-scale power outrage after typhoons or incidents similar in seriousness or nature
‘‘First Underwriter’’
Kingkey Securities Group Limited, a licensed corporation carrying out type 1 (dealing in securities) and type 4 (advising on securities) regulated activities under the SFO and its ordinary course of business includes underwriting of securities
‘‘Group’’ collectively, the Company and its subsidiaries
‘‘HKSCC’’
Hong Kong Securities Clearing Company Limited
‘‘Hong Kong’’
the Hong Kong Special Administrative Region of the People’s Republic of China

– 38 –

‘‘Independent Third any person or company and their respective ultimate beneficial Part(ies)’’ owner(s), to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, are third parties independent of the Company and its connected persons within the meaning of the Listing Rules
‘‘Last Trading Day’’ 14 July 2021, being the last trading day of the Existing Shares on the Stock Exchange prior to the release of this announcement
‘‘Latest Time for Acceptance’’
4: 00 p.m. on Tuesday, 28 September 2021 or such later time or date as may be agreed between the Parties in writing, being the latest time for acceptance of, and payment for, the Rights Shares and application for and payment for Excess Rights Shares as described in the Prospectus Documents
‘‘Latest Time for 4: 00 p.m. on Wednesday, 29 September 2021 or such later time Termination’’ or date as may be agreed between the Parties in writing, which shall be the latest time for termination of the Underwriting Agreement
‘‘Listing Committee’’ has the meaning as defined in the Listing Rules
‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the main board of the Stock Exchange as amended from time to time
‘‘MGO Obligation’’ the obligation to make a mandatory general offer under the Takeovers Code
‘‘New Share(s)’’ ordinary share(s) of par value of HK$0.01 each in the share capital of the Company immediately after the Capital Reorganisation becoming effective
‘‘Overseas such Shareholder(s) whose registered address(es) (as shown in Shareholder(s)’’ the register of members of the Company at the close of business on the Record Date) is/are situate outside Hong Kong
‘‘PAL(s)’’ the provisional allotment letter(s) in respect of the Rights Issue to be issued to the Qualifying Shareholders in respect to their pro rata entitlement under the Rights Issue
‘‘Prospectus’’
the prospectus (including any supplementary prospectus, if any) to be despatched to the Shareholders in connection with the Rights Issue in such form as may be agreed between the Parties
‘‘Prospectus Documents’’
the Prospectus, the PAL and the EAF

– 39 –

‘‘Prospectus Posting 13 September 2021 or such other date as may be agreed between Date’’ the Parties in writing, being the date for the despatch of the Prospectus Documents (in case of Excluded Shareholder(s), Prospectus only)

‘‘Public Float the public float requirement under Rule 8.08 of the Listing Rules Requirement’’
‘‘Qualifying the Shareholders whose names appear on the register of members Shareholders’’ of the Company at the close of business on the Record Date, other than the Excluded Shareholders
‘‘Record Date’’ 10 September 2021 or such other date as may be agreed between the Parties in writing, being the date for the determination of the entitlements under the Rights Issue
‘‘Registrar’’ Tricor Secretaries Limited, being the branch share registrar and transfer office of the Company in Hong Kong at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong
‘‘Relevant Proceeds’’ such gross amount as shall be equivalent to the Subscription Price multiplied by the actual number of the Rights Shares the subscription of which is procured by the Underwriter concerned pursuant to the Underwriting Agreement
‘‘Rights Issue’’ the proposed issue of the Rights Shares for subscription by the Qualifying Shareholders on the basis of one (1) Rights Share for every two (2) New Shares held at the close of business on the Record Date at the Subscription Price payable in full on application and otherwise on the terms and subject to the conditions precedent set out in the Underwriting Agreement and the Prospectus Documents

‘‘Rights Share(s)’’ up to 186,078,061 New Share(s) for subscription by the Qualifying Shareholders by way of the Rights Issue

‘‘Scale-down EAF such number of Rights Shares applied for as excess application Shares’’ under the EAF(s) which would, if allotted by the Company, result in either the incurring of an MGO Obligation on the part of the applicant or the failure to comply with the Public Float Requirement on the part of the Company

– 40 –

‘‘Scale-down PAL	such number of Rights Shares applied for under the PAL(s)
Shares’’	which would, if allotted by the Company, result in either the
	incurring of an MGO Obligation on the part of the applicant or
	the failure to comply with the Public Float Requirement on the
	part of the Company
‘‘Scaling-down’’	the scale-down mechanisms of the Rights Issue as determined by
	the Company to which any application for the Rights Shares,
	whether under the PALs or EAFs, or transferees of nil-paid
	Rights Shares shall be subject to ensure that no application for
	the Rights Shares or the allotment thereof by the Company shall
	be at such level which may trigger any MGO Obligation or non-
	compliance with the Public Float Requirement
‘‘Second	Koala Securities Limited, a licensed corporation carrying out
Underwriter’’	type 1 (dealing in securities) and type 4 (advising on securities)
	regulated activities under the SFO and its ordinary course of
	business includes underwriting of securities
‘‘SFC’’	the Securities and Futures Commission of Hong Kong
‘‘SFO’’	the Securities and Futures Ordinance (Chapter 571 of the Laws
	of Hong Kong)
‘‘SGM’’	the special general meeting of the Company to be convened and
	held for the Shareholders to consider and, if thought fit, approve
	the Capital Reorganisation
‘‘Share	the proposed consolidation of every ten (10) Existing Shares into
Consolidation’’	one (1) Consolidated Share
‘‘Share Subdivision’’	the proposed subdivision of every unissued Consolidated Share
	of HK$1.00 each in the authorised share capital of the Company
	(including those unissued Consolidated Shares arising from the
	Capital Reduction) into one hundred (100) New Shares of
	HK$0.01 each
‘‘Shareholder(s)’’	holder(s) of the Share(s) from time to time
‘‘Share(s)’’	the Existing Share(s), the Consolidated Share(s) and/or the New
	Share(s), whichever shall be appropriate

– 41 –

‘‘Specified Event’’

an event occurring or matter arising on or after the date of execution of the Underwriting Agreement and prior to the Latest Time for Termination which, if it had occurred or arisen before the date of execution of the Underwriting Agreement, would have rendered any of the warranties contained in the Underwriting Agreement untrue or incorrect in any material respect
‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited
‘‘Subscription Price’’ HK$0.40 per Rights Share
‘‘Takeovers Code’’ The Codes on Takeovers and Mergers and Share Buy-backs issued by the SFC
‘‘Underwriters’’ collectively, the First Underwriter and the Second Underwriter
‘‘Underwriting the underwriting agreement dated 14 July 2021 entered into Agreement’’ between the Company and the Underwriters and as revised, supplemented and/or amended from time to time in accordance with its terms
‘‘Underwritten up to 186,078,061 Rights Shares underwritten by the Shares’’ Underwriters on best effort basis pursuant to the Underwriting Agreement and the Appointment
‘‘Untaken Shares(s)’’ such number of Rights Shares in respect of which duly completed PAL(s) or EAF(s) have not been lodged for acceptance or not fully paid by the Latest Time for Acceptance, including any Rights Shares to which the Excluded Shareholders would not have otherwise been entitled under the Rights Issue

– 42 –

Hong Kong dollars, the lawful currency of Hong Kong

‘‘HK$’’

‘‘%’’

per cent.

By order of the Board China Baoli Technologies Holdings Limited Zhang Yi Chairman

Hong Kong, 14 July 2021

As at the date of this announcement, the executive Directors are Mr. Zhang Yi (Chairman), Ms. Chu Wei Ning (Chief Executive Officer) and Ms. Lam Sze Man; and the independent non-executive Directors are Mr. Chan Fong Kong, Francis, Mr. Chan Kee Huen, Michael and Mr. Feng Man.

– 43 –

AI assistant

WH Group Limited — Capital/Financing Update 2021

49096_rns_2021-07-14_13073e99-f17f-4600-b7f3-443310644281.pdf

China Baoli Technologies Holdings Limited 中國寶力科技控股有限公司

(I) PROPOSED CAPITAL REORGANISATION; AND

(II) PROPOSED RIGHTS ISSUE ON THE BASIS OF ONE (1) RIGHTS SHARE FOR EVERY TWO (2) NEW SHARES HELD ON THE RECORD DATE

(I) PROPOSED CAPITAL REORGANISATION

(II) PROPOSED RIGHTS ISSUE

Underwriting Agreement

WARNING OF THE RISKS OF DEALING IN THE EXISTING SHARES AND NIL-PAID RIGHTS SHARES

LISTING RULES IMPLICATIONS

GENERAL

(I) PROPOSED CAPITAL REORGANISATION

Effects of the Capital Reorganisation

Status of the New Shares

Conditions of the Capital Reorganisation

Listing Application

REASONS FOR THE CAPITAL REORGANISATION

BOARD LOT SIZE

OTHER ARRANGEMENT

Fractional entitlement to the New Shares

Free exchange of share certificates

Arrangement on odd lots trading

Adjustments in relation to the other securities of the Company

(II) PROPOSED RIGHTS ISSUE

Rights Issue statistics

Subscription Price

Status of the Rights Shares

Qualifying Shareholders

Closure of register of members

Rights of Overseas Shareholders

Basis of provisional allotments

Fractional entitlements

Application for Excess Rights Shares

Share certificates of the Rights Shares and refund cheques for the Rights Issue

Scale-down of subscriptions to avoid the triggering of MGO Obligation and non-compliance of Public Float Requirement

Taxation

Application for listing

THE UNDERWRITING AGREEMENT

Underwriting Agreement

Termination of the Underwriting Agreement

Conditions precedent of the Rights Issue

REASONS FOR AND BENEFITS OF THE RIGHTS ISSUE AND USE OF PROCEEDS

EFFECTS ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

EQUITY FUND RAISING ACTIVITIES OF THE COMPANY IN THE PAST TWELVE MONTHS

EXPECTED TIMETABLE

Event

EFFECT OF BAD WEATHER OR EXTREME CONDITIONS ON THE LATEST TIME FOR ACCEPTANCE OF AND PAYMENT FOR THE RIGHTS SHARES AND APPLICATION FOR AND PAYMENT FOR EXCESS RIGHTS SHARES

LISTING RULES IMPLICATIONS

GENERAL

DEFINITIONS

‘‘Specified Event’’

Hong Kong, 14 July 2021

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WH Group Limited Capital/Financing Update 2021