SKYOCEAN INTERNATIONAL HOLDINGS LIMITED

Transcription

1 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. SKYOCEAN INTERNATIONAL HOLDINGS LIMITED (Incorporated in Bermuda with limited liability) (Stock Code: 593) ISSUE OF (1) GUARANTEED AND SECURED RMB DENOMINATED CONVERTIBLE BONDS UNDER GENERAL MANDATE AND (2) GUARANTEED AND SECURED HKD DENOMINATED BONDS AND DISCLOSURE PURSUANT TO RULE OF THE LISTING RULES On 5 November 2015 (after trading hours), the Company, among other parties, entered into the Subscription Agreement with the Subscriber pursuant to which the Subscriber has conditionally agreed to subscribe in cash for (i) the Convertible Bonds in the aggregate principal amount of RMB29,520,000 (equivalent to approximately HK$36,000,000) due 2017 and (ii) the Bonds in the aggregate principal amount of HK$270,000,000 due Based on the initial Conversion Price of HK$12.00 per Conversion Share, a total of 3,000,000 Conversion Shares will be allotted and issued upon exercise of the conversion rights attaching to the Convertible Bonds in full, which represent approximately 1.22% of the existing issued share capital of the Company and approximately 1.21% of the issued share capital of the Company as enlarged by the issue of the Conversion Shares (assuming that there is no other change in the existing shareholding of the Company and no conversion of the Existing Convertible Bonds and/or the Outstanding Warrants). The Conversion Shares will be issued under the General Mandate. The initial Conversion Price represents: (i) a premium of about 12.78% over the closing price of HK$10.64 per Share as quoted on the Stock Exchange on the date of the Subscription Agreement; and (ii) a premium of about 12.15% over the average closing price of HK$10.70 per Share as quoted on the Stock Exchange for the last five (5) consecutive trading days immediately preceding the date of the Subscription Agreement. 1

2 The net proceeds from the issue of the Convertible Bonds and the Bonds (after deducting related expenses) are estimated to be of approximately HK$300 million and the Company intends to use such net proceeds for (i) general working capital of the Company; and/or (ii) merger and acquisitions by the Company, in each case with such proceeds being used outside of the PRC. Shareholders and potential investors should note that the Closing is subject to the fulfilment of the Conditions Precedent under the Subscription Agreement. As the Subscription may or may not proceed, Shareholders and potential investors are reminded to exercise caution when dealing in the Shares. On 5 November 2015 (after trading hours), the Company, SkyOcean Investment, Knowledge SV, Sheng Bang, Zhou Shi, Mr. Zhou, Ms. Zhou and the Subscriber entered into the Subscription Agreement, pursuant to which the Company has conditionally agreed to issue, and the Subscriber has conditionally agreed to subscribe for, (i) the Convertible Bonds in the aggregate principal amount of RMB29,520,000 (equivalent to approximately HK$36,000,000); and (ii) the Bonds in the aggregate principal amount of HK$270,000,000. Details of the Subscription Agreement and the terms of the Convertible Bonds and the Bonds are summarized below. THE SUBSCRIPTION AGREEMENT Date: 5 November 2015 (after trading hours) Issuer: The Company Subscriber: The Subscriber To the best of the Directors knowledge, information and belief, having made all reasonable enquiries, as at the date of this announcement, the Subscriber and its ultimate beneficial owner(s) are third parties independent of the Company and connected persons (as defined under the Listing Rules) of the Company. 2

3 Conditions Precedent: Closing is conditional upon, among others, the following Conditions Precedent: (a) (b) the Company having obtained a copy certified as true by a Director or the company secretary of the Company of the approval from the Stock Exchange for the listing of, and permission to deal in, the Conversion Shares; the Company having delivered to the Subscriber a copy certified as true by a Director or the company secretary of the Company of the resolutions of Shareholders approving the General Mandate; (c) the representations and warranties under the Subscription Agreement being true, correct, accurate, complete and not misleading when made, and continuing to be true, correct, accurate, complete and not misleading up to the Closing Date; (d) (e) (f) no event that would constitute an Event of Default (had the Convertible Bonds or the Bonds already been issued) having occurred; the Subscriber, in its sole opinion, being satisfied with the results of the due diligence in relation to the Warrantors and the Group including business and operation, deal structure, financial, tax, shareholders and related party transactions, know your customer and anti-money laundering, regulatory and legal aspects of each Warrantor and each member of the Group; and Mr. Zhou, through its direct and indirect shareholding in the Company, remaining to be the controlling shareholder of the Company, directly or indirectly holding no less than 51% of the entire shares issued by the Company on a Fully-Diluted Basis. 3

4 If any of the Conditions Precedent is not fulfilled (or waived by the Subscriber) on or before the Long Stop Date, the Subscriber may, at its option, (i) defer the Closing to a later date; (ii) proceed to the Closing so far as practicable but subject to such conditions as the Subscriber may determine at its sole discretion; or (iii) terminate the Subscription Agreement upon which the Subscription Agreement shall forthwith become null and void and cease to have any effect whatsoever and no Party shall have any claims against the other for costs, damages, compensations or otherwise (save for liabilities for any antecedent breaches of the Subscription Agreement). Closing: Company s undertakings Subject to the fulfillment of the above Conditions Precedent, Closing shall take place on a date no later than three (3) Business Days following the fulfillment or waiver of the Conditions Precedent (or such other date as the Company and the Subscriber may mutually agree). The Company agrees to, among other things, ensure and procure that during the term of the Subscription Agreement, the Convertible Bonds and the Bonds: (a) (b) (c) (d) the net asset value of the Company shall not be less than HK$2,200,000,000 at all times; the Company shall have a net profit for each financial year; the total liabilities of the Company (including the total principal amount of the Convertible Bonds and the Bonds) shall not be more than 75% of the total asset value of the Company; the auditors of the Company shall not provide qualified opinion in the Company s published annual or interim financial statements; 4

5 (e) (f) the Company shall not repay any portion of the Existing Related Party Loan or enter into any agreement and/or any other instrument or make any commitment under which the Company is obliged to repay the Existing Related Party Loan; and the Company shall not borrow or raise any money or incur any indebtedness (in whatever form or evidenced by whatever instrument) on such terms more favorable to the lenders or the creditors than those granted to the Subscriber under the Transaction Documents without the Subscriber s prior written consent. Controlling shareholder s undertakings: Mr. Zhou s undertakings: SkyOcean Investment agrees to, among other things, ensure and procure that during the term of the Subscription Agreement, the Convertible Bonds and the Bonds, it shall remain the legal and beneficial owner of at least 51% of the entire issued share capital of the Company on a Fully-Diluted Basis. Mr. Zhou agrees to, among other things, ensure and procure that during the term of the Subscription Agreement, the Convertible Bonds and the Bonds, (i) he shall, through his direct and indirect shareholdings in the Company, remain the beneficial owner of at least 51% of the entire issued share capital of the Company on a Fully-Diluted Basis; and (ii) he shall remain as a Director and the Chairman of the Company. PRINCIPAL TERMS OF THE CONVERTIBLE BONDS Principal amount: Term: Issue price: Interest rate: RMB29,520,000 (equivalent to approximately HK$36,000,000) 24 months from the Closing Date 100% of the principal amount of the Convertible Bond 8.5% per annum from and including the Issue Date to the Maturity Date and payable on semi-annual basis. 5

6 Status of the Convertible Bonds: Transfer of the Convertible Bonds: The Convertible Bonds constitute direct, unconditional, unsubordinated and secured obligations of the Company and rank equally and without any preference amongst themselves. The payment obligations of the Company under the Convertible Bonds will rank at least pari passu with all other present and future direct, unconditional, unsubordinated and unsecured obligations of the Company. The Convertible Bonds are freely transferrable in whole or in part of its outstanding principal amount. Such transfer shall be in compliance with the CB Conditions. The permitted transfer of the Convertible Bonds may only be made to person(s) which are not connected person of the Company. Maturity date and redemption: Conversion period: Conversion price: Unless previously converted or cancelled, any outstanding Convertible Bonds shall be redeemed on the Maturity Date. Each Convertible Bond shall entitle the CB Holder to convert such Convertible Bond (in part or in whole) into Shares at any time during the period from the first anniversary of the Issue Date up to and including the Maturity Date. The initial Conversion Price is HK$12.00 per Conversion Share, subject to customary adjustment for, among other matters, subdivision or consolidation of Shares, capitalisation of profits or reserves, capital distributions and rights issue. The initial Conversion Price represents: (a) (b) a premium of approximately 12.78% to the closing price of HK$10.64 per Share as quoted on the Stock Exchange on the date of the Subscription Agreement; and a premium of approximately 12.15% to the average closing price of HK$10.70 per Share as quoted on the Stock Exchange for the last five (5) consecutive trading days immediately preceding the date of the Subscription Agreement. 6

7 The Conversion Price of the Conversion Shares was determined after arm s length negotiations between the Company and the Subscriber with reference to the recent market prices and performance of the Shares, the current market conditions and the historical financial performance and the business prospects of the Group. The Directors (including the independent non-executive Directors) are of the opinion that the Conversion Price is fair and reasonable and in the interests of the Company and the Shareholders as a whole. Adjustments to the Conversion Price: The initial Conversion Price will from time to time be adjusted in accordance with the relevant provisions under the terms and conditions of the Convertible Bonds upon occurrence of the following events: (i) (ii) if and whenever the Shares by reason of any consolidation or sub-division become of a different nominal amount; if and whenever the Company shall issue (other than in lieu of a cash dividend) any Shares credited as fully paid by way of capitalisation of profits or reserves (including any share premium account or capital redemption reserve fund); (iii) if and whenever the Company shall make any capital distribution (whether on a reduction of capital or otherwise) or shall grant to Shareholders rights to acquire for cash assets of the Company or any of its subsidiaries; (iv) if and whenever the Company shall offer to Shareholders new Shares for subscription by way of rights, or shall grant to Shareholders any options or warrants to subscribe for any new Shares at a price which is less than the market price as at the date of the announcement of the terms of the offer or grant; 7

8 (v) (vi) if and whenever the Company shall issue wholly for cash any securities which by their terms are convertible into or exchangeable for or carry rights of subscription for new Shares, and the total effective consideration per Share initially receivable for such securities is less than the then market price of the Shares, or the rights of conversion or exchange or subscription are modified so that the total effective consideration per Share initially receivable for such securities shall be less than the then market price of the Shares; if and whenever the Company shall issue wholly for cash any Shares at a price per share which is less than the then market price of the Shares; and (vii) if and whenever the Company shall issue Shares for the acquisition of asset at a total effective consideration per Share which is less than the then market price of the Shares. Total Shares Value and mandatory early redemption: During the term of the Convertible Bonds and the Bonds, if, on any Trading Day, the Total Shares Value is less than 2 times of the aggregate outstanding principal amount of the Convertible Bonds and the Bonds and SkyOcean Investment elects not to deposit additional number of Shares into the Securities Account to restore the Total Shares Value to not less than 2.5 times of such aggregate outstanding principal amount, the Company shall, within five (5) Business Days from such Trading Day, redeem such portion of the outstanding principal amount of the Convertible Bonds and/or the Bonds such that after the redemption, the Total Shares Value shall not be lower than 2.5 times of the aggregate outstanding principal amount of the Convertible Bonds and the Bonds immediately after such redemption. 8

9 For the avoidance of doubt, subject to the above mentioned mandatory early redemption, no request for the repayment of any part of the principal moneys outstanding under the Convertible Bonds can be made by the CB Holders to the Company unless there is any occurrence of Events of Default prior to the Maturity Date. Conversion Shares: Based on the initial Conversion Price of HK$12.00 per Conversion Share, a maximum number of 3,000,000 Conversion Shares with an aggregate nominal value of HK$300, may fall to be allotted and issued upon exercise of the conversion rights attached to the Convertible Bonds in full, which represent: (a) (b) approximately 1.22% of the existing issued share capital of the Company as at the date hereof; and approximately 1.21% of the issued share capital as enlarged by the allotment and issue of the Conversion Shares to be allotted and issued upon the exercise of the Conversion Rights (assuming that there is no other change in the existing shareholding of the Company and no conversion of the Existing Convertible Bonds and/or the Outstanding Warrants). Ranking of the Conversion Shares: Voting: Listing: The Shares issued upon conversion of the Convertible Bonds will be fully-paid and free from any encumbrances, and in all respects rank pari passu with the Shares in issue on the relevant date of allotment; and shall accordingly entitle the holders thereof to participate in full in all dividends or other distributions the record date for which falls on a date on or after the relevant date of allotment. The CB Holder(s) will not be entitled to attend or vote at any meeting of the Company by reason only of it being the holder of the Convertible Bonds. No application will be made for the listing of, or permission to deal in, the Convertible Bonds on the Stock Exchange or any other stock exchange. Application will be made by the Company to the Stock Exchange for the listing of, and permission to deal in, the Conversion Shares. 9

10 PRINCIPAL TERMS OF THE BONDS Principal Amount: Issue Price: Maturity Date: Interest Rate: Status: Transferability: HK$270,000, % of the principal amount of the Bonds 24 months from the Closing Date 8.5% per annum from and including the Issue Date to the Maturity Date and payable on semi-annual basis The Bonds constitute direct, unconditional, unsubordinated and secured obligations of the Company and rank equally and without any preference amongst themselves. The payment obligations of the Company under the Bonds will rank at least pari passu with all other present and future direct, unconditional, unsubordinated and unsecured obligations of the Company. No application will be made for a listing of the Bonds. The Bonds are freely transferrable in whole or in part of the outstanding principal amount of the Bonds. Such transfer shall be in compliance with the Bonds Conditions. The permitted transfer of the Bonds may only be made to person(s) which are not connected persons of the Company. Mandatory early redemption: If, on any Trading Day, the Total Shares Value is less than 2 times of the aggregate outstanding principal amount of the Convertible Bonds and the Bonds and SkyOcean Investment elects not to deposit additional numbers of Shares into the Securities Account to restore the Total Shares Value to not less than 2.5 times of such aggregate outstanding principal amount, the Company shall, within five Business Days from such Trading Day, redeem such portion of the outstanding principal amount of the Bonds, such that after the redemption, the Total Shares Value shall not be lower than 2.5 times of the aggregate outstanding principal amount of the Convertible Bonds and the Bonds immediately after such redemption. 10

11 EVENTS OF DEFAULT FOR THE CONVERTIBLE BONDS AND BONDS Events of Default: If, among other things, any of the following events occur, the CB Holders and the Bondholders may give notice to the Company that the Convertible Bonds and the Bonds are immediately become due and payable at its principal amount and all other sums payable under the Convertible Bonds and the Bonds (as the case may be) (including any accrued but unpaid interests): (a) (b) (c) (d) any failure by the Company to pay the principal, and/or any interest due and payable on the Convertible Bonds and/or the Bonds or any other amount due and payable under the Convertible Bonds and/or the Bonds on its due date in the manner specified in the CB Conditions and/or the Bonds Conditions or any amount due and payable by the Company under any other Transaction Document in the manner specified thereunder; any breach or default by any Warrantor in the performance or observance of or compliance with any obligations, covenants, undertakings or other terms under any of the Transaction Documents and such breach or default is incapable of remedy or, if capable of remedy, is not remedied in full within five (5) Business Days from the date on which such breach or default occurs; any representation, warranty, certification or statement made by or on behalf of any Warrantor under any of the Transaction Documents shall have been incorrect, misleading or false; SkyOcean Investment ceases to be the legal and beneficial owner of at least 51% of the entire issued share capital of the Company on a Fully-Diluted Basis free and clear of any encumbrances; 11

12 (e) Mr. Zhou, through his direct and indirect shareholdings in the Company, ceases to be the beneficial owner of at least 51% of the entire issued share capital of the Company on a Fully-Diluted Basis free and clear of any encumbrances; (f) (g) (h) (i) (j) (k) the net asset value of the Company is less than HK$2,200,000,000; the total liabilities of the Company (including the total outstanding principal amount of the Convertible Bonds and the Bonds) exceeds 75% of the total asset value of the Company; the Company fails to make a net profit for any financial year; the Company repays any portion of the Existing Related Party Loan or has entered into any agreement and/or any other instrument or made any commitment under which the Company is obliged to repay the Existing Related Party Loan; the Company borrows or raises any money or incurs any indebtedness (in whatever form or evidenced by whatever instrument) on terms more favorable to the lenders or the creditors than those granted to the CB Holders and/or Bondholders contemplated under the Transaction Documents without the prior written consent of the majority of such CB Holders and/or Bondholders; and the Company ceases to be listed on the Main Board of the Stock Exchange. 12

13 SECURITY The Bonds and the Convertible Bonds are guaranteed under the personal guarantees provided by Mr. Zhou and Ms. Zhou respectively and the corporate guarantee provided by Beijing SkyOcean International Holdings Limited, and secured by the SkyOcean Investment Share Charge. GENERAL MANDATE TO ISSUE THE CONVERSION SHARES The Conversion Shares will be issued pursuant to the General Mandate. Immediately prior to entering into the Subscription Agreement, the General Mandate had not been utilised, and thus the maximum number of new Shares which could be issued under the General Mandate was 45,080,048 Shares (being 20% of the aggregate nominal amount of the total issued share capital of the Company of 225,400,240 Shares as at the date of the annual general meeting held on 12 June 2015). Accordingly, the Subscription Agreement and the allotment and issue of Conversion Shares are not subject to any Shareholders approval. REASONS FOR THE ISSUE OF THE CONVERTIBLE BONDS AND THE BONDS AND USE OF PROCEEDS The Group is principally engaged in the provision of elderly care services, medical equipment distribution, investment in technology and cultural industries, technology development and property development. The net proceeds from the issue of the Convertible Bonds and the Bonds, after deducting legal fees and other expenses payable by the Company, are estimated to be approximately HK$300 million. The net proceeds from such issue will be used for (i) general working capital of the Company; and/or (ii) merger and acquisitions by the Company, in each case with such proceeds being used outside of the PRC. The Directors are of the view that the issue of the Convertible Bonds and the Bonds represents a good opportunity for the Company to raise funds to strengthen its financial position as well as to provide further funding to the Group for its development and investment with an objective to provide attractive returns for the Shareholders since the issue of the Convertible Bonds and the Bonds will provide the Company with immediate funding without resulting in immediate dilution effect on the shareholding of the existing Shareholders and the Convertible Bonds and the Bonds bears a relatively low interest rate in comparison with the prevailing market interest rate for external borrowings in light of the financial situation of the Company. 13

14 Based on the above, the Directors consider that the terms of the Subscription Agreement, which were arrived at after arm s length negotiations between the Company and the Subscriber, are fair and reasonable, on normal commercial terms, and in the interests of the Company and the Shareholders as a whole. INFORMATION ON THE SUBSCRIBER The Subscriber is a limited liability company incorporated in the British Virgin Islands. It is indirectly and wholly-owned by CCBI. CCBI is an investment services flagship which is indirectly and wholly-owned by China Construction Bank Corporation, a joint-stock company incorporated in the PRC and listed on the Main Board of the Stock Exchange (stock code: 0939) and the Shanghai Stock Exchange (stock code: ). EFFECT ON SHAREHOLDING STRUCTURE OF THE COMPANY As at the date of this announcement, the Company has 245,364,934 Shares in issue. Set out below is the shareholding structure of the Company under various scenarios. (i) Assuming no exercise of the subscription rights attaching to the Outstanding Warrants and the conversion rights attached to the Existing Convertible Bonds and no other changes in the share capital of the Company (other than exercise of the Conversion Rights) Shareholders Immediately after full exercise As at the date of this announcement of the Conversion Rights attaching to the Convertible Bonds Number of Shares Approximate % Number of Shares Approximate % SkyOcean Investment (Note 1) 168,499, ,499, Other holders of warrants (Note 2) CB Holders 3,000, Other public shareholders 76,865, ,865, Total: 245,364, ,364,

15 (ii) Assuming exercise of the subscription rights attaching to the Outstanding Warrants in full and the conversion rights attached to the Existing Convertible Bonds in part and no other changes in the share capital of the Company (other than exercise of the Conversion Rights) Shareholders As at the date of this announcement Number of Approximate Shares % Immediately after exercise of the conversion rights attaching to the Existing Convertible Bonds in part (resulting in the public float falling to 25%) (Note 3) Number of Shares Approximate % Immediately after full exercise of the Conversion Rights attaching to the Convertible Bonds Number of Shares Approximate % SkyOcean Investment (Note 1) 168,499, ,716, ,716, Other holders of warrants (Note 2) 3,040, ,040, CB Holders 3,000, Other public shareholders 76,865, ,865, ,865, Total: 245,364, ,621, ,621,

16 (iii) Assuming exercise of the subscription rights attaching to the Outstanding Warrants in full and the conversion rights attached to the Existing Convertible Bonds in full and no other changes in the share capital of the Company (other than exercise of the Conversion Rights) Shareholders As at the date of this announcement Number of Approximate Shares % Immediately after exercise of the conversion rights attaching to the Existing Convertible Bonds in full (resulting in the public float below 25%) (Notes 4 and 5) Number of Shares Approximate % Immediately after full exercise of the Conversion Rights attaching to the Convertible Bonds (Note 5) Number of Shares Approximate % SkyOcean Investment (Note 1) 168,499, ,144, ,144, Other holders of warrants (Note 2) 3,040, ,040, CB Holders 3,000, Other public shareholders 76,865, ,865, ,865, Notes: Total: 245,364, ,049, ,049, As at the Latest Practicable Date, SkyOcean Investment is interested in (a) 168,499,654 Shares; and (b) 14,155,527 Outstanding Warrants. 2. As at the date of this announcement, the total number of Outstanding Warrants was 17,195,698 units carrying the rights to subscribe for up to 17,195,698 new Shares which will be allotted and issued upon exercise in full of the subscription rights attaching to the Outstanding Warrants. Excluding the 14,155,527 units of Outstanding Warrants held by SkyOcean Investment, there was 3,040,171 units of Outstanding Warrants as at the date of this announcement. 3. Under the terms of the Existing Convertible Bonds, SkyOcean Investment shall not exercise the conversion rights attached thereto to the extent that if immediately following the conversion, the Company will be unable to meet the public float requirement under Rule 8.08 of the Listing Rules, or if such conversion will trigger a mandatory general offer under the Hong Kong Code on Takeovers and Mergers. Assuming SkyOcean Investment (a) maintains its interests in 168,499,654 Shares; (b) exercises the subscription rights attaching to the 14,155,527 units of Outstanding Warrants in full and (c) exercises the conversion rights attached to the Existing Convertible Bonds in part to the extent which would result 16

17 in an additional 57,061,172 Shares to be allotted and issued to it, and other public shareholders exercise 3,040,171 units of Outstanding Warrants in full, the public float will fall to 25% (i.e. the minimum public float under the Listing Rules). 4. Assuming SkyOcean Investment (a) maintains its interests in 168,499,654 Shares; (b) exercises the subscription rights attaching to the 14,155,527 units of Outstanding Warrants in full; and (c) exercises the conversion rights attached to the Existing Convertible Bonds in full which would result in an additional 278,488,823 Shares to be allotted and issued to it, and other public shareholders exercise 3,040,171 units of Outstanding Warrants in full, the public float will fall below 25% (i.e. below the minimum public float requirement under the Listing Rules). 5. The shareholdings are for illustrative purpose only due to the public float requirement under the Listing Rules. FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS Set out below is a summary of the fundraising activities of the Company during the past twelve months immediately before the date of this announcement. Date of announcement Fundraising activity Net proceeds raised (approximately) Intended use of proceeds Actual use of proceeds 28 May 2015 and 18 June 2015 Placing of new Shares under a general mandate which was completed on 18 June 2015 HK$136,830,000 General working capital of the Group General working capital of the Group PUBLIC FLOAT The Company will monitor closely and will ensure that it maintains the minimum public float percentage as prescribed under the Listing Rules from time to time. The Company s public float will not fall below the minimum prescribed percentage under the Listing Rules upon the conversion of the Convertible Bonds. GENERAL No application will be made by the Company to the Listing Committee for listing of the Convertible Bonds and/or the Bonds. An application will be made to the Listing Committee for the listing of, and permission to deal in, the Conversion Shares on the Stock Exchange. 17

18 DISCLOSURE PURSUANT TO RULE OF THE LISTING RULES Pursuant to the terms and conditions of the Convertible Bonds and the Bonds, the controlling shareholders, namely SkyOcean Investment and Mr. Zhou, shall at all times maintain an aggregate beneficial ownership (directly or indirectly) of not less than 51% in the issued share capital of the Company on a Fully-Diluted Basis throughout the term of the Convertible Bonds and the Bonds. A breach of such covenant constitutes an Event of Default. As at the date of this announcement, SkyOcean Investment beneficially owns approximately 68.67% of the issued share capital of the Company. In accordance with the requirements under Rule of the Listing Rules, the Company will make disclosures in its subsequent interim and annual reports for so long as circumstances giving rise to the aforesaid specific performance obligation of the controlling shareholders continue to exist. Shareholders and potential investors should note that the Closing is subject to fulfilment of the Conditions Precedent under the Subscription Agreement. As the Subscription may or may not proceed, Shareholders and potential investors are reminded to exercise caution when dealing in the Shares. DEFINITIONS The following expressions in this announcement have the meanings set out below unless the context requires otherwise: Affiliate in relation to any party, another entity which is directly or indirectly controlled by, or under common control with, or in control of, that party, control here refers to the power or authority to direct the business, management, policies or activities of an entity, or the beneficial ownership or power to direct the vote of more than 50% of the votes entitled to be cast at a meeting of the members or shareholders of an entity, or the power to appoint or remove or control the composition of a majority of the board of directors of an entity Board the board of Directors 18

19 Bonds Bondholder(s) Bonds Certificate Bonds Conditions Business Day(s) CB Certificate CB Conditions CB Holder(s) CCBI Closing Closing Date the HKD denominated bonds proposed to be issued by the Company the holder of the Bonds the certificate to be issued in respect of the Bonds, together with the Bonds Conditions the terms and conditions to the Bonds to be attached to the Bonds Certificate a day on which commercial banks in Hong Kong are generally open for business other than Saturday and Sunday or a public holiday, or a day on which commercial banks do not open for business owing to a tropical cyclone warning signal number 8 or above or a black rainstorm warning signal being in force in Hong Kong the certificate to be issued in respect of the Convertible Bonds, together with the CB Conditions the terms and conditions to the Convertible Bonds to be attached to the CB Certificate the holder(s) of the Convertible Bonds CCB International (Holdings) Limited, a company incorporated in Hong Kong with limited liability closing of the subscription of the Convertible Bonds and Bonds in accordance with the terms of the Subscription Agreement the date on which the Closing occurs, which shall be a day no later than three (3) Business Days after the Long Stop Date (or such other date as the Company and the Subscriber may mutually agree) after the Conditions Precedent are fulfilled or otherwise waived 19

20 Company Conditions Precedent connected person controlling shareholder Conversion Period Conversion Price Conversion Rights Conversion Shares Convertible Bonds Director(s) Event(s) of Default SkyOcean International Holdings Limited ( ), a company incorporated in Bermuda with limited liability, the issued securities of which are listed on the Main Board of the Stock Exchange (stock code: 593 and warrant code: 664) the conditions precedent to the Closing as set out in the Subscription Agreement has the meaning ascribed to it in the Listing Rules has the meaning ascribed to it under the Listing Rules the period commencing from and including the date which is the first anniversary of the issue date of the Convertible Bonds and including the Maturity Date the price per Share at which the Convertible Bonds may be converted into Shares, which is initially set at HK$12.00 per Conversion Share (subject to adjustments as set out in CB Conditions) the rights of the CB Holder(s) to convert the whole or any part of outstanding principal amount of the Convertible Bonds held by it into Shares the Shares which may fall to be allotted and issued upon exercise of the Conversion Rights the RMB denominated convertible bonds in the principal amount of RMB29,520,000 (equivalent to approximately HK$36,000,000) to be issued by the Company to the Subscriber pursuant to the Subscription Agreement the director(s) of the Company the events of default of the Convertible Bonds and/or the Bonds as stipulated in the CB Conditions and/or the Bonds Conditions (as the case may be) 20

21 Existing Related Party Loan Existing Convertible Bonds Fully-Diluted Basis General Mandate Group HK$ or HKD Hong Kong Issue Date Knowledge SV Long Stop Date the loan in the aggregate outstanding principal amount of HK$2,660,000,000 owed by the Company to its related party SkyOcean Qian an the 5-year zero-coupon convertible bonds in the aggregate principal amount of HK$1,893,724,000 issued by the Company to SkyOcean Investment as disclosed in the announcement dated 2 February 2015, 25 February 2015, 31 March 2015, 12 June 2015, 2 October 2015 and 30 October 2015 and the circular dated 18 May 2015 of the Company means the calculation of shareholding ratio on the basis of the assumption that all the outstanding options, warrants and other stock equity securities convertible into, exercisable or exchangeable for ordinary shares of the relevant company (whether or not they are at present convertible, exercisable or exchangeable according to the relevant provisions) have been converted, exercised or exchanged accordingly the general mandate granted to the Directors at the annual general meeting of the Company held on 12 June 2015 to allot, issue and otherwise deal in up to 45,080,048 Shares the Company and its subsidiaries Hong Kong dollars, the lawful currency of Hong Kong the Hong Kong Special Administrative Region of the PRC the date of issue of the Convertible Bonds and the Bonds Knowledge Silicon Valley Limited ( ), a company incorporated in the British Virgin Islands with limited liabilities and is owned as to 80% by Sheng Bang and as to 20% by Zhou Shi 31 December 2015 or such other date as the Company and the Subscriber may mutually agree 21

22 Listing Rules Maturity Date Mr. Zhou Ms. Zhou Outstanding Warrants PRC RMB Securities Account Share(s) Shareholder(s) Sheng Bang the Rules Governing the Listing of Securities on the Stock Exchange the date falling on the second (2nd) anniversary of the Issue Date Mr. Zhou Zheng ( ), being a Director and substantial shareholder of the Company Ms. Zhou Jin ( ), being a Director in the last 12 months and also the sister of Mr. Zhou and the spouse of Mr. Liu Li, one of the Directors 17,195,698 units of outstanding warrants of the Company entitling the holders thereof to subscribe at any time during the period from 4 March 2011 to 4 March 2016 (both days inclusive) for fully paid Shares at an adjusted subscription price of HK$4.95 per Share in cash (subject to adjustments) (Warrant Code: 664) The People s Republic of China, which for the sole purpose of this announcement excludes Hong Kong, Macau Special Administrative Region and Taiwan Renminbi, the lawful currency of the PRC a sub-account opened with CCB International Securities Limited in the name of the Company ordinary share(s) of par value of HK$0.10 each in the share capital of the Company the holder(s) of the Share(s) Sheng Bang Holdings Limited ( ), a company incorporated in the British Virgin Islands with limited liabilities and is a wholly-owned company of Mr. Zhou 22

23 SkyOcean Investment SkyOcean Investment Share Charge SkyOcean Investment Holding Limited ( ), a company incorporated in the British Virgin Islands with limited liabilities and a wholly-owned subsidiary of Knowledge SV and a substantial shareholder of the Company the share charge to be entered into between SkyOcean Investment as chargor and the Subscriber as the chargee prior to the Closing pursuant to which SkyOcean Investment will charge such number of Shares held by it in favour of the Subscriber as follows: Number of shares = (HK$270,000,000+HK$36,000,000) x 2.5 P whereas P represents the lower of (i) the average of the per Share volume-weighted average price for the 10 consecutive Trading Days immediately preceding the Closing; and (ii) the closing price of Shares on the Trading Day immediately preceding the Closing Date SkyOcean Qian an Stock Exchange SkyOcean Real Estate (Qian an) Co., Ltd.* ( ), a company established in the PRC with limited liability, which is beneficially owned as to 80% by Mr. Zhou and as to 20% by Ms. Zhou The Stock Exchange of Hong Kong Limited Subscriber Chance Talent Management Limited, a company incorporated in the British Virgin Islands with limited liabilities and an indirect wholly-owned subsidiary of CCBI Subscription Subscription Agreement the subscription for the Convertible Bonds and the Bonds by the Subscriber pursuant to the Subscription Agreement the subscription agreement dated 5 November 2015 and entered into among the Company, SkyOcean Investment, Knowledge SV, Sheng Bang, Zhou Shi, Mr. Zhou, Ms. Zhou and the Subscriber in relation to the Subscription 23

24 substantial shareholder Total Shares Value Trading Day Transaction Documents has the meaning ascribed to it under the Listing Rules with respect to any Trading Day, the amount equal to the closing price per Share on the Stock Exchange multiplied by the total number of the Shares held in the Securities Account on such Trading Day a day on which trading is conducted on the Main Board of the Stock Exchange in accordance with the Trading Rules of the Stock Exchange other than a day on which both the morning and the afternoon trading sessions or either of them is cancelled owing to a tropical cyclone warning signal no. 8 or above or a black rainstorm warning signal being in force in Hong Kong collectively, (i) the Subscription Agreement; (ii) the Convertible Bonds and the CB Certificates (together with the CB Conditions); (iii) the Bonds and the Bonds Certificate (together with the Bonds Conditions); (iv) the personal guarantees to be provided by Mr. Zhou and Ms. Zhou and the documents related thereto; (v) the corporate guarantee to be provided by Beijing SkyOcean International Holdings Limited and the documents related thereto; (vi) the SkyOcean Investment Share Change; (vii) the account documentation in respect of the cash securities trading account and the supplemental deed relating thereto and (viii) any other documents designated as such by the Investor and any Warrantor Warrantors collectively the Company, SkyOcean Investment, Knowledge SV, Sheng Bang, Zhou Shi, Mr. Zhou and Ms. Zhou, and each a Warrantor Zhou Shi Zhoushi Holdings Limited ( ), a company incorporated in the British Virgin Islands with limited liabilities and is a wholly-owned company of Ms. Zhou 24

25 For the purpose of this announcement, translations of Renminbi into Hong Kong dollars or vice versa have been calculated by using an exchange rate of RMB1.00 equal to HK$ Such exchange rate has been used, where applicable, for the purpose of illustration only and does not constitute a representation that any amounts were, may have been or will be exchanged at such rate or any other rates or at all. By Order of the Board SKYOCEAN INTERNATIONAL HOLDINGS LIMITED Zhou Zheng Chairman Hong Kong, 5 November 2015 As at the date of this announcement, the Board comprises Mr. Zhou Zheng (Chairman and Chief Executive Officer), Mr. Liu Li, Mr. Yang Hongguang and Mr. Chan Tak Kwong being the executive Directors, and Mr. Li Chak Hung, Dr. Meng Xiaosu, Mr. Yang Buting and Mr. Zhao Daxin being the independent non-executive Directors. * For identification purpose only 25