Value Convergence Holdings Limited (Incorporated in Hong Kong with limited liability) Website: (Stock Code: 821)

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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 is for information purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company. Value Convergence Holdings Limited (Incorporated in Hong Kong with limited liability) Website: (Stock Code: 821) PLACING OF NEW SHARES UNDER GENERAL MANDATE Placing Agent PLACING OF NEW SHARES VC Brokerage Limited On 28 July 2017 (after trading hours), the Company entered into the Placing Agreement with the Placing Agent whereby the Company agreed to place, through the Placing Agent, on a best effort basis, up to an aggregate of 132,000,000 Placing Shares to not less than six Placees at a price of HK$0.91 per Placing Share. The maximum of 132,000,000 Placing Shares represent approximately (i) 19.92% of the aggregated number of the issued share of the Company as at the date of this announcement; and (ii) 16.61% of the aggregated number of issued share of the Company as enlarged by the issue of the 132,000,000 Placing Shares. The Placing Price of HK$0.91 represents (i) a discount of approximately 19.47% to the closing price of HK$1.13 per Share as quoted on the Stock Exchange on the date of this announcement, being the date of the Placing Agreement; and (ii) a discount of approximately 19.75% to the average of the closing prices for the five consecutive trading days immediately prior to the date of this announcement as quoted on the Stock Exchange of HK$1.134 per Share. Assuming all the Placing Shares are successfully placed by the Placing Agent, the aggregate gross proceeds from the Placing will be approximately HK$120 million and the Company intends 1

2 to use the net proceeds of approximately HK$117 million from the Placing for (i) general working capital of the Group; (ii) expanding the Group s proprietary trading, brokerage and financing, and corporate finance businesses; and (iii) possible investment(s) in the future when opportunities arise. The Placing is not subject to Shareholders approval as the Placing Shares will be issued under the General Mandate. Shareholders and potential investors should note that completion of the Placing is subject to fulfillment of the conditions under the Placing Agreement. As the Placing may or may not proceed, Shareholders and potential investors are reminded to exercise caution when dealing in the Shares. THE PLACING AGREEMENT Date 28 July 2017 (after trading hour) Issuer The Company Placing Agent VC Brokerage Limited, a wholly-owned subsidiary of the Company. Placees The Placing Shares will be placed to not less than six Placees, who are independent institutional, professional and/or individual investors, who and whose ultimate beneficial owners are not connected with any directors, chief executive or substantial shareholder of the Company or its subsidiaries and their respective associates. Placing Shares Pursuant to the Placing Agreement, the Placing Agent agreed to procure, on a best effort basis, not less than six Placees to subscribe for up to an aggregate of 132,000,000 Placing Shares at the Placing Price. The maximum of 132,000,000 Placing Shares represent approximately (i) 19.92% of the aggregated number of the issued share of the Company as at the date of this announcement; and (ii) 16.61% of the aggregated number of issued share of the Company as enlarged by the issue of the 132,000,000 Placing Shares. 2

3 Placing Price The Placing Price of HK$0.91 represents (i) a discount of approximately 19.47% to the closing price of HK$1.13 per Share as quoted on the Stock Exchange on the date of this announcement, being the date of the Placing Agreement; and (ii) a discount of approximately 19.75% to the average of the closing prices for the five consecutive trading days immediately prior to the date of this announcement as quoted on the Stock Exchange of HK$1.134 per Share. The Placing Price was determined after arm s length negotiations between the Company and the Placing Agent on the date of the Placing Agreement with reference to the prevailing market price of the Shares. The Directors consider that the terms of the Placing Agreement (including the Placing Price) are fair and reasonable and that the Placing is in the interests of the Company and the Shareholders as a whole. Conditions Precedent to the Placing Agreement Completion shall be conditional upon satisfaction or fulfillment of the following conditions: (a) the Board having approved the Placing and the transactions contemplated under the Placing Agreement; (b) the Placing Agent having successfully procured Placee(s) ready, willing and able to subscribe for and to accept the allotment of the Placing Shares or any part thereof during the Placing Period; (c) the Company having complied with, and procured for the compliance with, all conditions imposed by the Stock Exchange or by any other competent authority (in Hong Kong or elsewhere) for approving of the Placing, issuance and allotment of the Placing Shares as well as the listing of and permission to deal in the Placing Shares and ensure the continued compliance thereof (provided in each case that the Placee(s) complies with and satisfies all such conditions); (d) the Company having submitted the list of Placees to the Stock Exchange for approval (which list of Placees shall set out the name and personal particulars of each Placee) and the Stock Exchange having approved the same; (e) the Listing Committee of the Stock Exchange having granted approval for the listing of, and permission to deal in, the Placing Shares on the Stock Exchange and the approval not having been subsequently revoked or cancelled; (f) the Shares remaining listed on the Main Board of the Stock Exchange, and that the listing status of the Shares not being subject to or threatened with any revocation, cancellation, withdrawal or suspension whatsoever; 3

4 (g) (if required) the Company having obtained the necessary consent, approval, authorisation, permission, or confirmation from any third party to which the Company or its Subsidiaries have entered into any agreement or arrangement; and (h) the Company's representations and warranties made pursuant to the Placing Agreement being true and accurate and not misleading as from the execution of the Placing Agreement up to Completion. If the conditions precedent to the Placing Agreement are not fulfilled prior to expiry of the Closing Date or such later date as may be agreed between the Company and the Placing Agent, the Placing Agreement will lapse and become null and void. Termination and Force Majeure The Placing Agreement may be terminated by the Placing Agent upon giving notice to the Company if at any time between the date of the Placing Agreement and at 5:00 p.m. on the Business Day immediately prior to the date of Completion, there occurs: (a) (b) (c) the introduction of any new Law or regulation or any change in existing Laws or regulations (or the judicial interpretation thereof) or other occurrence of any nature whatsoever which may, in the reasonable opinion of the Placing Agent, materially and adversely affect the business or the financial or trading position or prospects of the Company; or the occurrence of any local, national or international event or change occurring after the date of the Placing Agreement of a political, military, financial, economic, currency (including a change in the system under which the value of the Hong Kong currency is linked to the currency of the United States of America) or other nature (whether or not sui generis with any of the foregoing), or in the nature of any local, national, international outbreak or escalation of hostilities or armed conflict, or affecting local securities market or the occurrence of any combination of circumstances which may, in the reasonable opinion of the Placing Agent, materially and adversely affect the business or the financial or trading position or prospects of the Company or adversely prejudices the success of the Placing (such success being the completion of the placing of the Placing Shares to potential investor(s)) or otherwise makes it inexpedient or inadvisable for the Company or the Placing Agent to proceed with the Placing; or any change in market conditions or combination of circumstances in Hong Kong (including without limitation suspension or material restriction on trading in securities) occurs after the date of the Placing Agreement which materially and adversely affects the success of the Placing (such success being the completion of the placing of the Placing Shares to potential investor(s)) or otherwise in the reasonable opinion of the Placing Agent make it inexpedient or inadvisable or inappropriate for the Company or the Placing Agent to proceed with the Placing. 4

5 Upon termination of the Placing Agreement pursuant to the abovementioned factors, all obligations of the Company and the Placing Agent shall cease and the Company shall not be liable to pay any commission under the Placing Agreement and no party of the Placing Agreement shall have any claim against the other party in respect of any matter or thing arising out of or in connection with the Placing Agreement save of any antecedent breach of any obligation under the Placing Agreement. Completion Completion of the Placing shall take place on any Business Day falling within five (5) Business Days after the Closing Date. Placing Commission The Placing Agent shall receive a placing commission of 2.5% of the aggregate amount equal to the Placing Price multiplied by the number of Placing Shares placed during the Placing Period. General Mandate The Placing Shares will be issued and allotted under the General Mandate. As at the date of this announcement, the General Mandate has not been utilized since it was granted and the number of new Shares that could be issued by the Company under the General Mandate is 132,523,365 Shares. Application for Listing The Company will apply to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Placing Shares. REASONS FOR THE PLACING AND USE OF PROCEEDS The Group is an established financial services group committed to delivering premier financial services and products that can fulfill the various investment and wealth management needs of clients in the Greater China region. The Group s expertise includes provision of financial services comprising securities, futures and options brokering and dealing, financing services, corporate finance advisory services in relation to sponsoring and underwriting initial public offerings, and mergers and acquisitions and asset management, and proprietary trading. Assuming all the Placing Shares are successfully placed by the Placing Agent, the aggregate gross proceeds from the Placing will be approximately HK$120 million and the Company intends to use the net proceeds of approximately HK$117 million from the Placing for (i) general working capital of the Group; (ii) expanding the Group s proprietary trading, brokerage and financing, and corporate finance businesses; and (iii) possible investment(s) in the future when opportunities arise. The net Placing Price will be approximately HK$0.887 per Share. 5

6 The Directors are of the view that the Placing will broaden the Shareholders portfolio. The Placing will also strengthen the financial position of the Group. As set out in the annual report of the Group for the year ended 31 December 2016, the Group s business strategies continue to include enlarging its revenue base through fostering its core businesses, and tapping into new emerging markets with expanded business activities. The Group will continue to explore business opportunities in the PRC market. The Placing will therefore enhance the Group s flexibility in future business developments or investments as and when opportunities arise. Accordingly, the Board considers that the Placing is in the interests of the Company and the Shareholders as a whole. EQUITY FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS The Company had not conducted any equity fund raising activities in the 12 months prior to the date of this announcement. SHAREHOLDING STRUCTURE The existing shareholding structure of the Company and the effect on the shareholding structure of the Company upon completion of the Placing are set out as below, for illustration purposes:- Shareholders & Directors Shareholding as at the date of this announcement Shareholding upon completion of the Placing Number of Shares Approximately % Number of Shares Approximately % 1 Power Global Group Limited 75,000,000 1 Mr. Chung Chi Shing, Eric 17,352,000 2 Mr. Wong Chung Kin, Quentin 500, % 75,000, % 2.62% 17,352, % 0.08% 500, % Placees ,000, % Public Shareholders 569,764, % 569,764, % Total 662,616, % 794,616, % Notes: 1. Power Global Group Limited is a company 100% owned by Mr. Chung Chi Shing, Eric, an executive director of the Company. 2. Mr. Wong Chung Kin, Quentin is an independent non-executive director of the Company. GENERAL The Placing is not subject to Shareholders approval as the Placing Shares will be issued under the General Mandate. 6

7 Shareholders and potential investors should note that completion of the Placing is subject to fulfillment of the conditions under the Placing Agreement. As the Placing may or may not proceed, Shareholders and potential investors are reminded to exercise caution when dealing in the Shares. DEFINITIONS The following terms have the following meanings in this announcement unless the context otherwise requires: associate(s) Board Business Day(s) Closing Date Company Completion connected person(s) Director(s) General Mandate Group HK$ Hong Kong has the meaning ascribed to it in the Listing Rules the board of Directors any day (excluding Saturday, Sunday or public holiday) on which licensed banks in Hong Kong are generally open for business in Hong Kong means 18 August 2017, being the date on which all conditions have been satisfied or fulfilled, and the parties may agree in writing to have the Closing Date postponed to a later Business Day Value Convergence Holdings Limited, a company incorporated in Hong Kong with limited liability, the shares of which are listed on the Main Board of the Stock Exchange the completion of the Placing, which shall take place on any Business Day falling within five (5) Business Days after the Closing Date has the meaning ascribed to it in the Listing Rules directors of the Company the general mandate which was granted to the Directors pursuant to an ordinary resolution passed at the Company s annual general meeting held on 25 May 2017 to issue and allot up to 132,523,365 new Shares, representing 20% of the aggregate number of the issued share of the Company in issue on the date of the meeting the Company and its subsidiaries Hong Kong dollars, the lawful currency of Hong Kong the Hong Kong Special Administrative Region of the People s Republic of China 7

8 Listing Rules Placee(s) Placing Rules Governing the Listing of Securities on the Stock Exchange any independent institutional, professional and/or individual investors who are not concert parties with who and whose ultimate beneficial owners are not connected with any directors, chief executive or substantial shareholder of the Company or its subsidiaries and their respective associates the best effort placing of up to a maximum of 132,000,000 Placing Shares Placing Agent VC Brokerage Limited, a licensed corporation to carry on type 1 (dealing in securities) and type 4 (advising on securities) regulated activities under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) Placing Agreement Placing Period Placing Price Placing Shares Share(s) Shareholders Stock Exchange HK$ the agreement entered into between the Company and the Placing Agent dated 28 July 2017 in respect of the Placing the period commencing upon the date of the Placing Agreement and terminating at 5:00 p.m. on 10 August 2017, unless terminated earlier in writing pursuant to the terms of the Placing Agreement HK$0.91 per Placing Share up to a maximum of 132,000,000 new Shares to be issued under the Placing the issued ordinary share in the share capital of the Company holders of the Shares The Stock Exchange of Hong Kong Limited Hong Kong dollars, the lawful currency of Hong Kong % per cent. By order of the board of Value Convergence Holdings Limited Tin Ka Pak, Timmy Chief Executive Officer & Executive Director Hong Kong, 28 July

9 As at the date of this announcement, the board of Directors comprises four Executive Directors, namely, Mr. Tin Ka Pak, Timmy (Chief Executive Officer), Mr. Lin Hoi Kwong, Aristo, Mr. Xie Jintai and Mr. Chung Chi Shing, Eric; and three Independent Non-executive Directors, namely, Mr. Wong Chung Kin, Quentin, Mr. Wong Kam Choi, Kerry, MH and Mr. Siu Miu Man, Simon. 9