Optima Capital 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 the shares or other securities of China Precious Metal Resources Holdings Co., Ltd. CHINA PRECIOUS METAL RESOURCES HOLDINGS CO., LTD. (Incorporated in the Cayman Islands with limited liability) (Stock code: 1194) MAJOR TRANSACTION AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF MUNSUN ASSETS MANAGEMENT LTD. Financial Adviser to the Company Optima Capital Limited Independent Financial Adviser to the Independent Board Committee and Independent Shareholders Reference is made to the announcement of the Company dated 30 July 2014 in relation to the MOU entered into between the Company, Mr. Li and Mr. Zhang with respect to the possible sale and purchase of the shares in the Offshore Target Company and the equity interests in the PRC Target Company and the announcement of the Company dated 29 January 2015 in relation to the PRC Acquisition Agreement and the agreement dated 29 January 2015 and entered into between the Company and the Sellers in relation to the negotiation of the Acquisition. THE OFFSHORE ACQUISITION AGREEMENT The Board is pleased to announce that after the Stock Exchange trading hours on 1 April 2015, the Company and the Sellers, being the shareholders of the Offshore Target Company, entered into the Offshore Acquisition Agreement, pursuant to which, among other things, the Sellers have conditionally agreed to sell, and the Company has conditionally agreed to purchase, the Sale Shares at the aggregate Consideration of HK$1,300,000,000, which will be satisfied by the issue of the Consideration Shares and the Convertible Bonds by the Company in accordance with the terms of the Offshore Acquisition Agreement. The Sale Shares represent the entire issued share capital of the Offshore Target Company. The Offshore Target Group is principally engaged in the provision of investment management and advisory services. 1

2 IMPLICATIONS UNDER THE LISTING RULES Pursuant to Rule 14A.81 of the Listing Rules, the Acquisition and the PRC Acquisition are required to be aggregated due to Mr. Li being a seller under both acquisitions. As one or more of the Relevant Ratios in respect of the Acquisition, when aggregated with the PRC Acquisition, exceed 25% but are less than 100%, the Acquisition constitutes a major transaction of the Company under Chapter 14 of the Listing Rules. Mr. Li, being one of the Sellers, was a non-executive Director within 12 months from the date of the Offshore Acquisition Agreement and is therefore a connected person of the Company. Hence, the Acquisition (together with the PRC Acquisition, when aggregated with the Acquisition) also constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. The Acquisition, which includes the allotment and issue of the Consideration Shares, the Convertible Bonds and the Conversion Shares, and the PRC Acquisition are, therefore, subject to the approval by the Independent Shareholders at the EGM. Mr. Li and his associates are required to abstain from voting on the relevant resolutions to be proposed at the EGM to approve the Offshore Acquisition Agreement and the transactions contemplated thereunder (including the issue of the Consideration Shares, the Convertible Bonds and the Conversion Shares) and the PRC Acquisition Agreement and the transactions contemplated thereunder. FINANCIAL ADVISER, INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISER Optima Capital Limited has been appointed as the financial adviser to the Company. The Independent Board Committee comprising Professor Wong Lung Tak, Patrick, Mr. Chan Kin Sang and Professor Xiao Rong Ge, being all the independent non-executive Directors, has been established to advise the Independent Shareholders in relation to the Acquisition and the PRC Acquisition. Gram Capital Limited has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in relation to the Acquisition and the PRC Acquisition. GENERAL In order to provide the Shareholders with information to consider and assess the Acquisition, the Circular will contain, among other things, (a) further details on the Acquisition and the PRC Acquisition; (b) financial and other information of the Offshore Target Group and the PRC Target Group; and (c) the unaudited pro forma financial information of the Enlarged Group. It will also contain (i) the recommendation of the Independent Board Committee in relation to the Acquisition and the PRC Acquisition; (ii) a letter of advice from Gram Capital to the Independent Board Committee and the Independent Shareholders in relation to the Acquisition and the PRC Acquisition; and (iii) the notice of the EGM to be convened for the purpose of considering and approving the Offshore Acquisition Agreement and the transactions contemplated thereunder, including the issue of the Consideration Shares, the Convertible Bonds and the Conversion Shares, and the PRC Acquisition Agreement and the transactions contemplated thereunder. As it will take time to prepare the foregoing financial and other information for inclusion in the Circular, it is expected that the Circular will be despatched to the Shareholders on or before 29 May It should be noted that completion of the Acquisition is subject to a number of Conditions, including but not limited to the PRC Acquisition Agreement becoming unconditional, which may or may not be fulfilled. The Acquisition may or may not proceed. Shareholders and potential investors of the Company should exercise caution when they deal or contemplate dealing in the Shares and other securities of the Company. 2

3 INTRODUCTION Reference is made to the announcement of the Company dated 30 July 2014 in relation to the MOU entered into between the Company, Mr. Li and Mr. Zhang with respect to the possible sale and purchase of the shares in the Offshore Target Company and the equity interests in the PRC Target Company and the announcement of the Company dated 29 January 2015 in relation to the PRC Acquisition Agreement and the agreement dated 29 January 2015 and entered into between the Company and the Sellers in relation to the negotiation of the Acquisition. After further negotiations with the shareholders of the Offshore Target Company, the Board is pleased to announce that after the Stock Exchange trading hours on 1 April 2015, the Company and the Sellers, being the shareholders of the Offshore Target Company, entered into the Offshore Acquisition Agreement, pursuant to which, among other things, the Sellers have conditionally agreed to sell, and the Company has conditionally agreed to purchase, the Sale Shares in the Offshore Target Company at the aggregate Consideration of HK$1,300,000,000, which will be satisfied by the issue of the Consideration Shares and the Convertible Bonds by the Company in accordance with the terms of the Offshore Acquisition Agreement. Details of the Offshore Acquisition Agreement are set out below. THE OFFSHORE ACQUISITION AGREEMENT Date 1 April 2015 Parties 1. Mr. Li, Mr. Zhang, Golden Eagle, Ms. Xia, Keenet International, Perfect Cheers, Zhang Weibiao, Olympic Ocean, He Shujun, Ruan Jinghui and Yan Le (as the Sellers ); and 2. The Company (as purchaser). Assets to be acquired The Sale Shares, being the entire issued share capital of the Offshore Target Company. Consideration The aggregate amount of the Consideration payable by the Company to the Sellers in respect of the Acquisition is HK$1,300,000,000, which comprises the First Consideration in the amount of HK$580,000,000, the Second Consideration in the amount of HK$200,000,000 and the Third Consideration in the amount of HK$520,000,000. The Consideration will be satisfied by the allotment and issue of the Consideration Shares at the Issue Price of HK$0.76 per Consideration Share and the issue of the Convertible Bonds by the Company to the Sellers, such that each Seller will receive the Relevant Portion of the Consideration Shares and the Convertible Bonds as follows: (a) Relevant First Consideration On the Completion Date, the Company will satisfy the Relevant First Consideration by allotting and issuing the Relevant First Consideration Shares at the Issue Price to each of the Sellers. 3

4 (b) Relevant Second Consideration (i) (ii) Within 15 Business Days after the audited completion accounts of the Offshore Target Group to be prepared after Completion and the certificate of the independent auditor have been signed and issued by the auditor, the Company will satisfy the Relevant Second Consideration by allotting and issuing the Relevant Second Consideration Shares at the Issue Price to each of the Sellers. If the Net Asset Value is less than HK$700,000,000, then the amount of the Relevant Second Consideration will be adjusted (the Adjusted Relevant Second Consideration ) as follows: Adjusted Relevant = Relevant Second Consideration A Second Consideration where A = (HK$700,000,000 Net Asset Value) x Relevant Portion and the number of Relevant Second Consideration Shares to be issued by the Company to each of the Sellers will be adjusted by dividing the Adjusted Relevant Second Consideration by the Issue Price (rounded down to the nearest whole number). (iii) If the amount of the Adjusted Relevant Second Consideration is equal to zero or is negative, then no part of the Relevant Second Consideration will be payable by the Company to any Seller. (c) Relevant Third Consideration (i) (ii) On the Completion Date, the Company will satisfy the Relevant Third Consideration by issuing the Relevant Convertible Bonds to each of the Sellers. The Relevant Convertible Bonds will carry no redemption rights. Holder of the Relevant Convertible Bonds may, during the Conversion Period, convert the Relevant Convertible Bonds into such number of Conversion Shares (rounded down to the nearest whole number) as calculated by dividing the Principal Amount by the Conversion Price. (iii) Subject to the condition that the Offshore Target Group is operating in the manner and under the management that is substantially the same as that before the Completion Date, if the 2015 Net Profit is less than HK$100,000,000 and/or the 2016 Net Profit is less than HK$100,000,000, then the amount of the Relevant Third Consideration will be adjusted (the Adjusted Relevant Third Consideration ) as follows: Adjusted Relevant = Relevant Third Consideration B C Third Consideration where B = (HK$100,000, Net Profit) x Relevant Portion C = (HK$100,000, Net Profit) x Relevant Portion and the amount of the Principal Amount will be the Adjusted Relevant Third Consideration. 4

5 (iv) If, on or before the Third Consideration Settlement Date, the Company has notified any of the Sellers in writing of any claim against such Seller under any provision of the Offshore Acquisition Agreement (the Relevant Claim ), and the Relevant Claim has not been settled or resolved and/ or paid in full, then the Relevant Convertible Bonds held by such Seller will not be convertible to the extent of the amount of the Relevant Claim. Upon the Relevant Claim having been settled or resolved and the amount payable by such Seller under the Relevant Claim (the Compensation ) has been determined, the amount of the Relevant Third Consideration or (if the amount of the Relevant Third Consideration will be adjusted pursuant to (c)(iii) above) the Adjusted Relevant Third Consideration will be reduced by the amount of the Compensation (the amount after reduction being the Further Adjusted Relevant Third Consideration ). The amount of the Principal Amount will be the Further Adjusted Relevant Third Consideration and the relevant Seller may convert the Relevant Convertible Bonds in the principal amount of the Further Adjusted Relevant Third Consideration from the later of the Third Consideration Settlement Date and the date on which the Relevant Claim is settled or resolved (as the case may be) and the amount of Compensation is determined until the day falling six months thereafter (both days inclusive). If the amount of the Further Adjusted Relevant Third Consideration is equal to zero or is negative, then no part of the Relevant Third Consideration will be payable by the Company to any Seller. (v) If, on or before the Third Consideration Settlement Date, any of the Claim Events exists, then upon the written notice by the Company to the relevant Seller, the Relevant Convertible Bonds will not be convertible by such Seller and the Company and such Seller shall negotiate in good faith with a view to agreeing on the amount of the losses and expenses which the relevant Offshore Target Group Company has suffered or may suffer as a result of any Claim Event (the Damages ), failing which the matter will be referred to an independent expert to be engaged by the Company and such Seller for determination of the Damages. The amount of the Relevant Third Consideration or (if the amount of the Relevant Third Consideration will be adjusted pursuant to (c)(iii) above) the Adjusted Relevant Third Consideration or (if the amount of the Relevant Third Consideration will be adjusted pursuant to (c)(iv) above) the Further Adjusted Relevant Third Consideration will be reduced by the amount of the Relevant Portion of the Damages agreed or determined by the expert (as the case may be) (the amount after reduction being the Final Adjusted Relevant Third Consideration ). The amount of the Principal Amount will be the Final Adjusted Relevant Third Consideration and the relevant Seller may convert the Relevant Convertible Bonds in the principal amount of the Final Adjusted Relevant Third Consideration from the later of the Third Consideration Settlement Date and the date on which the Damages are agreed or determined by the expert (as the case may be) until the day falling six months thereafter (both days inclusive). If the amount of the Final Adjusted Relevant Third Consideration is equal to zero or is negative, then no part of the Relevant Third Consideration will be payable by the Company to any Seller. (vi) Claim Events include (1) revocation, suspension or variation of, or imposition of new condition or qualification on, the Licenses; (2) imposition of any fine or monetary penalty on any Offshore Target Company; and (3) imposition of any sanction, penalty or order (other than fine or monetary penalty) on any Offshore Target Group Company or any responsible officer or licensed representative of any Offshore Target Group Company, in each case as a result of anything done or omitted to be done by any Seller or any Offshore Target Group Company, or by any responsible officer or licensed representative of any Offshore Target Group Company in the course of performing his or her duties as such responsible officer or licensed representative (as determined by the relevant court, governmental or regulatory authority), on or before the Completion Date (except the consummation of the sale and purchase of the Sale Shares under the Offshore Acquisition Agreement). 5

6 The Consideration was determined after arm s length negotiations between the Company and the Sellers with reference to the net asset value of the Offshore Target Group as at 31 December 2014, historical financial performance and prospects of the Offshore Target Group. Conditions to Completion Completion of the Acquisition is conditional upon the satisfaction (or, if applicable, waiver) of the following Conditions: (a) (b) (c) (d) (e) (f) (g) the entry into and performance of the Offshore Acquisition Agreement and the transactions contemplated thereby by the Company, including but not limited to the purchase of the Sale Shares and the issue of the Consideration Shares, the Convertible Bonds and the Conversion Shares, having been approved by the Shareholders in accordance with applicable legal and regulatory requirements; approval of the Company becoming a substantial shareholder (as defined under the SFO) of each of Munsun HK and Munsun Securities under section 132 of the SFO having been obtained, the form and content of such approval being reasonably satisfactory to the Company and such approval not having been revoked or withdrawn before the Completion Date; none of the Offshore Target Company, Munsun HK or Munsun Securities or any investment fund or trust under its management or to which it provides any investment or management service (the Targets ) holding or having any direct or indirect interest in any shares or other securities of the Company or any interest or voting or other right therein (the Company Interests ), evidenced by written documents to the reasonable satisfaction of the Company, and no obligation to make a mandatory general offer under Rule 26 of the Code on Takeovers and Mergers having been triggered as a result of any transfer or other disposal of any of the Company Interests by any of the Targets; none of the transactions contemplated under the Offshore Acquisition Agreement being treated by the Stock Exchange as a reverse takeover and/or deemed new listing of the Company under the Listing Rules; approval for the listing of, and permission to deal in, the Consideration Shares and the Conversion Shares having been granted by the Stock Exchange and not having been revoked or withdrawn; all applicable requirements under any laws, rules and regulations of any applicable jurisdictions (including but not limited to the Listing Rules) for the sale and purchase of the Sale Shares and transactions relating thereto as contemplated by the Offshore Acquisition Agreement having been complied with, including the obtaining of all necessary approvals by any government authorities or regulatory authorities in Hong Kong or any other jurisdictions, the content of such approvals being reasonably satisfactory to the Company; all relevant approvals, consents or authorisations required under any contract or agreement entered into by the Company or any of the Offshore Target Group Companies for the sale and purchase of the Sale Shares and the transactions relating thereto as contemplated by the Offshore Acquisition Agreement having been obtained, the content of such approvals, consents or authorisations being reasonably satisfactory to the Company; 6

7 (h) (i) (j) (k) (l) no injunction, restraining order or other order or any other legal or regulatory objection, restraint or prohibition having been issued or made by any court of competent jurisdiction or any other governmental or regulatory authority which prevents the sale and purchase of the Sale Shares, the issue of the Consideration Shares, the Convertible Bonds or the Conversion Shares and the transactions relating thereto as contemplated by the Offshore Acquisition Agreement; all the warranties given by the Sellers being true and accurate in all material respects and not misleading from the date of the Offshore Acquisition Agreement to the Completion Date (both days inclusive) by reference to the facts and circumstances subsisting at the Completion Date; all the warranties given by the Company being true and accurate in all material respects and not misleading from the date of the Offshore Acquisition Agreement to the Completion Date (both days inclusive) by reference to the facts and circumstances subsisting at the Completion Date; no change, event or circumstance having occurred which has or may have a material adverse effect on any Offshore Target Group Company (save and except for matters disclosed in the audited consolidated financial statements of the Offshore Target Group for the year ended on 31 December 2014 prepared in accordance with HKFRS); and the conditions to which completion of the transactions to be effected pursuant to the PRC Acquisition Agreement is subject (except for the condition that the conditions to which completion of the transactions to be effected pursuant to the Offshore Acquisition Agreement is subject have been satisfied) having been satisfied (or, if applicable, waived) in accordance with the terms of that agreement. The Conditions set out in (g) (with respect to any of the Offshore Target Group Companies), (i), (k) and (l) may be waived by the Company. The Conditions set out in (g) (with respect to the Company) and (j) above may be waived by the Sellers. None of the other Conditions may be waived by any party. If any of the Conditions is not fulfilled (or, if applicable, waived) on or before the Long Stop Date, the Offshore Acquisition Agreement will terminate with immediate effect. Completion of the Acquisition Completion of the Acquisition will take place on the date falling ten Business Days after the day on which the last of the Conditions has been satisfied (or, if applicable, waived) or such other date as the Company and the Sellers may agree in writing. Upon Completion, the Offshore Target Company will become a wholly-owned subsidiary of the Company, and the financial results of the Offshore Target Group will be consolidated into the financial statements of the Group. Lock-up undertakings by the Sellers (a) (b) Each of Mr. Li and Mr. Zhang has undertaken to the Company that within one year following (A) the date of allotment and issue of the Relevant First Consideration Shares; and (B) the date of allotment and issue of the Relevant Second Consideration Shares; and each of Golden Eagle, Ms. Xia, Keenet International, Perfect Cheers, Zhang Weibiao, Olympic Ocean, He Shujun, Ruan Jinghui and Yan Le has undertaken to the Company that within six months following (A) the date of allotment and issue of the Relevant First Consideration Shares; and (B) the date of allotment and issue of the Relevant Second Consideration Shares, 7

8 it will not and will procure none of its nominees, companies controlled by it and trusts associated with it will: (i) (ii) (1) sell or contract to sell; (2) sell any option or contract to purchase; (3) purchase any option or contract to sell; (4) grant any option, right or warrant in respect of; or (5) otherwise transfer or dispose of (either conditionally or unconditionally, directly or indirectly, or otherwise), (in respect of (a)(a) and (b)(a) above) the Relevant First Consideration Shares or (in respect of (a)(b) and (b)(b) above) the Relevant Second Consideration Shares; or (6) announce any intention to enter into or effect any of the foregoing transaction; or enter into any swap or similar agreement that transfers, in whole or in part, the economic risk of ownership of (in respect of (a)(a) and (b)(a) above) the Relevant First Consideration Shares or (in respect of (a)(b) and (b)(b) above) the Relevant Second Consideration Shares, or announce any intention to enter into or effect any such transaction, whether any such transaction described in (i) or (ii) above is to be settled by delivery of shares or such other securities, or in cash or otherwise, provided that each Seller may mortgage, charge or pledge the Relevant First Consideration Shares or the Relevant Second Consideration Shares as security for a bona fide loan with a licensed bank or broker. CONSIDERATION SHARES The Consideration Shares to be allotted and issued by the Company under the Acquisition represent (a) approximately 22.30% of the total Shares in issue as at the date of this announcement; and (b) approximately 18.24% of the total Shares in issue as enlarged by the allotment and issue of the Consideration Shares. The Consideration Shares will be allotted and issued under a specific mandate proposed to be obtained at the EGM. The Consideration Shares will rank equally among themselves and pari passu in all respects with the Shares in issue on the date of the allotment and issue of the Consideration Shares. Application for the listing of, and permission to deal in, the Consideration Shares to be allotted and issued pursuant to the Offshore Acquisition Agreement will be made by the Company to the Stock Exchange. CONVERTIBLE BONDS The following is a summary of the principal terms of the Convertible Bonds: Interest : The Convertible Bonds will not bear any interest. Redemption : Holders of the Convertible Bonds will have no right to require the Company to redeem the Convertible Bonds or any part thereof. The Company will have no right to redeem or repurchase the Convertible Bonds or any part thereof. 8

9 Conversion : Each holder of the Convertible Bonds will be entitled, at any time during the Conversion Period, to exercise the conversion rights to convert all (but not some) of the Convertible Bonds held by it into fully paid new Shares, the number (rounded down to the nearest whole number) of which will be calculated by dividing the Principal Amount by the Conversion Price, subject to the adjustments to the Principal Amount and the modifications of the Conversion Period as described in the section headed The Offshore Acquisition Agreement The Consideration in this announcement. Upon full conversion of the Convertible Bonds at the Conversion Price (without any adjustment), an aggregate of 684,210,526 Conversion Shares will be issued by the Company, representing (a) approximately 14.87% of the total Shares in issue as at the date of this announcement; and (b) approximately 10.84% of the total Shares in issue as enlarged by the allotment and issue of the Consideration Shares (assuming all Second Consideration Shares are issued) and the Conversion Shares (assuming full conversion of the Convertible Bonds without any adjustment). The conversion right of any of the Convertible Bonds shall not be exercised for and only for so long as immediately following the conversion, the Company will be unable to meet the minimum public float requirement under the Listing Rules. Transferability : The Convertible Bonds (or any part thereof) shall not be assigned or transferred. Voting : The Convertible Bonds do not carry any voting right. Listing : No application will be made for the listing of the Convertible Bonds on any stock exchange. An application will be made for the listing of, and permission to deal in, the Conversion Shares on the Stock Exchange. ISSUE PRICE AND CONVERSION PRICE The Issue Price of HK$0.76 for each Consideration Share and the Conversion Price of HK$0.76 for each Conversion Share were determined at the time of the MOU with reference to the average of the closing prices of the Shares of approximately HK$0.75 per Share as quoted on the Stock Exchange for the 30 consecutive trading days up to and including the date of the MOU. The Issue Price of HK$0.76 for each Consideration Share and the Conversion Price of HK$0.76 for each Conversion Share represent: (a) (b) (c) a premium of approximately 26.67% over the closing price of the Shares of HK$0.60 per Share as quoted on the Stock Exchange on the Last Trading Day; a premium of approximately 35.71% over the average of the closing prices of the Shares of approximately HK$0.56 per Share as quoted on the Stock Exchange for the 10 consecutive trading days up to and including the Last Trading Day; a premium of approximately 31.03% over the average of the closing prices of the Shares of approximately HK$0.58 per Share as quoted on the Stock Exchange for the 30 consecutive trading days up to and including the Last Trading Day; 9

10 (d) (e) a premium of approximately 15.15% over the average of the closing prices of the Shares of approximately HK$0.66 per Share as quoted on the Stock Exchange for the 90 consecutive trading days up to and including the Last Trading Day; and a discount of approximately 40.63% to the audited consolidated net asset value attributable to the Shareholders of approximately HK$1.28 per Share (based on the audited consolidated net assets attributable to the Shareholders of approximately HK$5,883 million as at 31 December 2014 and 4,601,830,763 Shares in issue as at the date of this announcement). EFFECTS OF THE ACQUISITION ON THE SHAREHOLDING STRUCTURE OF THE COMPANY The following table sets out, for illustrative purpose only, the effect of the Acquisition on the Shares in issue (assuming no other Shares are issued) (a) immediately after Completion of the Acquisition and the issue of the First Consideration Shares; (b) immediately after issue of the Second Consideration Shares (assuming all the Second Consideration Shares are issued); and (c) immediately after the conversion of the Convertible Bonds (assuming full conversion of the Convertible Bonds at the Conversion Price without any adjustment): Immediately after Immediately after conversion of Immediately after issue of Second the Convertible Bonds Completion Consideration Shares (assuming full conversion of of the Acquisition (assuming all the Second the Convertible Bonds As at the date of and issue of First Consideration at the Conversion Price this announcement Consideration Shares Shares are issued) without any adjustment) Approximate Approximate Approximate Approximate % of total % of total % of total % of total number of Shares number of Shares number of Shares number of Shares Shares in issue Shares in issue Shares in issue Shares in issue Mr. Li 12,000, ,340, ,561, ,935, Other Sellers 521,817, ,754, ,169,591, Munsun HK (Note 1) 672,230, Chang Yim Yang (Note 2) 625,802, ,802, ,802, ,802, Other Directors (Note 3) 122,749, ,749, ,749, ,749, Public shareholders 3,169,048, ,841,278, ,841,278, ,841,278, Total 4,601,830, ,364,988, ,628,146, ,312,357, Notes: (1) Munsun HK is interested in the Shares by virtue of (a) it being the investment manager of certain investment funds which hold those Shares, whereby the Offshore Target Company and Munsun Securities are interested in four of these investment funds which hold, in aggregate, 100,322,000 Shares, and (b) the Offshore Target Company itself directly holds 23,400,000 Shares. Accordingly, Munsun HK is beneficially interested in 123,722,000 Shares in aggregate. (2) Chang Yim Yang is interested in the Shares by virtue of his personal interest and his 100% interest in Lead Pride Holdings Limited. (3) These Directors include Lam Cham (interested in 107,417,821 Shares), Zhang Shuguang (interested in 13,732,000 Shares), Chan Kin Sang (interested in 800,000 Shares) and Wong Lung Tak, Patrick (interested in 800,000 Shares). 10

11 INFORMATION ON THE GROUP The Group is principally engaged in the business of mining and processing of gold ores and sale of gold products in the PRC. The Group currently has mining rights in five operating gold mines located in the central, western and northern regions of the PRC, namely Jinxing Mine and Luanling Mine in Henan Province, Mojiang Mine and Hengyi Mine in Yunnan Province, and Yongfeng Mine in Inner Mongolia. The Group also provides financing services to customers under finance lease and factoring arrangements in the PRC. INFORMATION ON THE SELLERS Mr. Li was a non-executive Director who resigned on 9 July As at the date of this announcement, Mr. Li holds approximately % of the issued shares in the Offshore Target Company and 12,000,000 Shares. The original acquisition costs of Mr. Li s shareholding in the Offshore Target Company was approximately US$16,000 (approximately HK$124,000). Mr. Zhang holds approximately % of the issued shares in the Offshore Target Company as at the date of this announcement. Golden Eagle is an investment holding company. It holds approximately 15% of the issued shares in the Offshore Target Company as at the date of this announcement. Ms. Xia holds approximately % of the issued shares in the Offshore Target Company as at the date of this announcement. She is also a shareholder of the PRC Target Company. Keenet International is an investment holding company. It holds approximately 10% of the issued shares in the Offshore Target Company as at the date of this announcement. Perfect Cheers is an investment holding company. It holds approximately 3.5% of the issued shares in the Offshore Target Company as at the date of this announcement. Zhang Weibiao holds approximately % of the issued shares in the Offshore Target Company as at the date of this announcement. Olympic Ocean is an investment holding company. It holds approximately % of the issued shares in the Offshore Target Company as at the date of this announcement. He Shujun holds approximately 1% of the issued shares in the Offshore Target Company as at the date of this announcement. Ruan Jinghui holds approximately 1% of the issued shares in the Offshore Target Company as at the date of this announcement. Yan Le holds approximately 1% of the issued shares in the Offshore Target Company as at the date of this announcement. To the best of the Directors knowledge, information and belief having made all reasonable enquiries, save for (a) being business partners in the Offshore Target Company and/or the PRC Target Company (as the case may be) with Mr. Li; and (b) its indirect interest in the Shares through its shareholding in the Offshore Target Company, each of the Sellers (other than Mr. Li) and (in the case of a Seller being a company) its ultimate beneficial owner(s) is a third party independent of the Company and its connected persons. 11

12 INFORMATION ON THE OFFSHORE TARGET COMPANY, MUNSUN HK AND MUNSUN SECURITIES The Offshore Target Company and Munsun HK The Offshore Target Company was incorporated in the Cayman Islands as an exempted company with limited liability. It is an investment holding company and its principal asset is its 100% interest in Munsun HK. The Offshore Target Company is also interested in approximately 56.2% of the issued share capital in Munsun Securities. Munsun HK is licensed for Type 9 (asset management) and Type 4 (advising on securities) regulated activities under the SFO since 8 March 2012 and 30 October 2014, respectively. Its principal business activity is provision of investment management and advisory services. Munsun HK is currently managing three company funds, five limited partnership funds and four umbrella trust funds. It also provides asset management and investment advisory services to two designated accounts. Munsun Securities Munsun Securities is a brokerage firm in Hong Kong licensed for Type 1 (dealing in securities) regulated activity under the SFO. The Offshore Target Company subscribed for new shares in Munsun Securities in May 2014 and as a result, became interested in approximately 56.2% of the total issued share capital of Munsun Securities. Munsun Securities has, however, not been accounted for as a subsidiary of the Offshore Target Company since, according to the Offshore Target Company, it was entitled under the agreement with the other shareholders in Munsun Securities to appoint less than half of the members of, and hence has not been in control of, the board of directors of Munsun Securities. Financial information of the Offshore Target Group Set out below is selected financial information of the Offshore Target Group based on the unaudited consolidated financial statements of the Offshore Target Group prepared in accordance with HKFRS for the two years ended 31 December 2013 and 31 December 2014: For the For the year ended year ended 31 December 31 December HK$ 000 HK$ 000 Profit before tax 482,103 5,623 Profit/(loss) after tax attributable to shareholders of the Offshore Target Company 435,399 (1,257) As at 31 December 2014 HK$ 000 Net asset value attributable to shareholders of the Offshore Target Company 844,782 12

13 INFORMATION ON THE PRC TARGET GROUP The following information on the PRC Target Group is given in this announcement for the purpose of providing information to the Shareholders to consider and assess the Acquisition. The PRC Target Company and the PRC Investment Company were incorporated in the PRC with limited liability. The PRC Target Group is principally engaged in the provision of investment research and ancillary investment support services and investment management and consultancy services. The PRC Investment Company is the general partner of the Shenzhen LP Fund who is responsible for the management of that fund. (Tencent Technology (Shenzhen) Company Limited*) (or its subsidiary) and (PICC Assets Management Company Limited*) (or its investment vehicle) are the major limited partners of the Shenzhen LP Fund. The Shenzhen LP Fund was established in 2012 and has invested RMB10 billion (equivalent to approximately HK$12.4 billion) in Sinopec Marketing Co. by way of subscription of its registered capital. Based on the announcement of Sinopec dated 12 September 2014: (a) (b) (c) (d) as part of the reorganisation of its marketing business, Sinopec injected all its 31 provincial subsidiaries and their long-term equity investments as well as all businesses, assets, personnel of Sinopec Fuel Oil Sales Corporation Limited, Sinopec (Hong Kong) Limited, and Sinopec (Hong Kong) Aviation Fuel Limited into Sinopec Marketing Co.; Sinopec Marketing Co. is engaged in the sale and distribution of refined oil products purchased from Sinopec and third parties. As at the end of 2013, Sinopec Marketing Co. owned a total of 30,351 service stations and compressed natural gas/liquefied natural gas stations under the Sinopec brand and had approximately 80 million holders of Sinopec fuel cards; Sinopec Marketing Co. is also engaged in the operation of convenience stores and an e-commerce platform ( EJoy365.com ), etc. As at the end of 2013, Sinopec Marketing Co. owned 23,431 convenience stores operating under the Easy Joy brand; and for the year ended 31 December 2013, Sinopec Marketing Co. recorded income of approximately RMB1,498.6 billion (equivalent to approximately HK$1,858.3 billion) and net profit attributable to equity holders of Sinopec Marketing Co of approximately RMB25.1 billion (equivalent to approximately HK$31 billion). For the two years ended 31 December 2013 and 2014, the PRC Target Group derived its revenue mainly from the provision of investment consultancy and research services by the PRC Target Company to the Offshore Target Group. The PRC Investment Company is currently a wholly-owned subsidiary of the PRC Target Company and is expected to become an associate of the PRC Target Company under HKFRS at the time of completion of the PRC Acquisition. In addition to the investment management business of the PRC Investment Company, the PRC Target Company will continue to expand its own investment management business in the PRC. With the successful debut of the Shenzhen LP Fund, the PRC Target Company is confident of the prospect of its business. 13

14 REASONS FOR AND BENEFITS OF THE ACQUISITION The Group is principally engaged in the business of mining and processing of gold ores and sale of gold products in the PRC. The Group s business is currently exposed to cyclical fluctuations in both the price of gold and the market demand for and supply of gold from time to time. The Directors consider that it would be beneficial for the Group to seek suitable investment opportunities to diversify its existing business portfolio and to broaden the Group s source of income. The investment management and advisory business of the Offshore Target Group is a fast-growing business. The Directors believe the Group would benefit from the additional revenue generated by the Offshore Target Group, which would help the Group to diversify its business risks. The Directors (excluding the independent non-executive Director who will express their views after having considered the advice of Gram Capital) consider that the terms of the Offshore Acquisition Agreement (together with the PRC Acquisition Agreement, when aggregated with the Acquisition) are fair and reasonable and the Acquisition (together with the PRC Acquisition, when aggregated with the Acquisition) are in the interests of the Company and the Shareholders as a whole. IMPLICATIONS UNDER THE LISTING RULES Pursuant to Rule 14A.81 of the Listing Rules, the Acquisition and the PRC Acquisition are required to be aggregated due to Mr. Li being a seller under both acquisitions. As one or more of the Relevant Ratios in respect of the Acquisition, when aggregated with the PRC Acquisition, exceed 25% but are less than 100%, the Acquisition constitutes a major transaction of the Company under Chapter 14 of the Listing Rules. Mr. Li, being one of the Sellers, was a non-executive Director within 12 months from the date of the Offshore Acquisition Agreement and is therefore a connected person of the Company. Hence, the Acquisition (together with the PRC Acquisition, when aggregated with the Acquisition) also constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. The Acquisition, which includes the allotment and issue of the Consideration Shares, the Convertible Bonds and the Conversion Shares, and the PRC Acquisition are, therefore, subject to the approval by the Independent Shareholders at the EGM. Mr. Li and his associates are required to abstain from voting on the relevant resolutions to be proposed at the EGM to approve the Offshore Acquisition Agreement and the transactions contemplated thereunder (including the issue of the Consideration Shares, the Convertible Bonds and the Conversion Shares) and the PRC Acquisition Agreement and the transactions contemplated thereunder. FINANCIAL ADVISER, INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISER Optima Capital Limited has been appointed as the financial adviser to the Company. The Independent Board Committee comprising Professor Wong Lung Tak, Patrick, Mr. Chan Kin Sang and Professor Xiao Rong Ge, being all the independent non-executive Directors, has been established to advise the Independent Shareholders in relation to the Acquisition and the PRC Acquisition. Gram Capital Limited has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in relation to the Acquisition and the PRC Acquisition. 14

15 GENERAL In order to provide the Shareholders with information to consider and assess on the Acquisition, the Circular will contain, among other things, (a) further details on the Acquisition and the PRC Acquisition; (b) financial and other information of the Offshore Target Group and the PRC Target Group; and (c) the unaudited pro forma financial information of the Enlarged Group. It will also contain (i) the recommendation of the Independent Board Committee in relation to the Acquisition and the PRC Acquisition; (ii) a letter of advice from Gram Capital to the Independent Board Committee and the Independent Shareholders in relation to the Acquisition and the PRC Acquisition; and (iii) the notice of the EGM to be convened for the purpose of considering and approving the Offshore Acquisition Agreement and the transactions contemplated thereunder, including the issue of the Consideration Shares, the Convertible Bonds and the Conversion Shares, and the PRC Acquisition Agreement and the transactions contemplated thereunder. As it will take time to prepare the foregoing financial and other information for inclusion in the Circular, it is expected that the Circular will be despatched to the Shareholders on or before 29 May It should be noted that completion of the Acquisition is subject to a number of Conditions, including but not limited to the PRC Acquisition Agreement becoming unconditional, which may or may not be fulfilled. The Acquisition may or may not proceed. Shareholders and potential investors of the Company should exercise caution when they deal or contemplate dealing in the Shares and other securities of the Company. DEFINITIONS In this announcement, the following expressions shall have the meanings set out below unless the context requires otherwise: 2015 Net Profit the net profit after taxation of the Offshore Target Group for the year ending 31 December 2015 and derived from the audited consolidated financial statements of the Offshore Target Group for the year ending 31 December 2015 prepared in accordance with HKFRS 2016 Net Profit the net profit after taxation of the Offshore Target Group for the year ending 31 December 2016 and derived from the audited consolidated financial statements of the Offshore Target Group for the year ending 31 December 2016 prepared in accordance with HKFRS Adjusted Relevant Second Consideration Adjusted Relevant Third Consideration Acquisition associates Board has the meaning given that term in the section headed The Offshore Acquisition Agreement Consideration in this announcement has the meaning given that term in the section headed The Offshore Acquisition Agreement Consideration in this announcement the proposed acquisition of the Sale Shares by the Company from the Sellers pursuant to the Offshore Acquisition Agreement has the meaning given that term under the Listing Rules the board of Directors 15

16 Business Day Circular Claim Events Company Company Interests Compensation Completion Completion Date Conditions connected person Consideration Consideration Shares Conversion Shares a day (other than a Saturday or Sunday or a public holiday) when commercial banks are open for ordinary banking business in Hong Kong the circular to be issued to the Shareholders by the Company in accordance with the Listing Rules in respect of, among other things, the Acquisition, the Offshore Acquisition Agreement, the PRC Acquisition and the PRC Acquisition Agreement has the meaning given that term in the section headed The Offshore Acquisition Agreement Consideration in this announcement China Precious Metal Resources Holdings Co., Ltd. (Stock Code: 1194), a company incorporated in the Cayman Islands on 14 January 2004 with limited liability, the shares of which are listed and traded on the Main Board of the Stock Exchange has the meaning given that term in the section headed The Offshore Acquisition Agreement Conditions to Completion in this announcement has the meaning given that term in the section headed The Offshore Acquisition Agreement Consideration in this announcement completion of the sale and purchase of the Sale Shares pursuant to the Offshore Acquisition Agreement the date on which Completion takes place pursuant to the terms of the Offshore Acquisition Agreement the conditions to Completion of the Acquisition under the Offshore Acquisition Agreement, as further described in the section headed The Offshore Acquisition Agreement Conditions to Completion in this announcement has the meaning given that term under the Listing Rules the consideration payable for the Sale Shares under the Offshore Acquisition Agreement in the amount of HK$1,300,000,000, comprising the First Consideration, the Second Consideration and the Third Consideration the First Consideration Shares and the Second Consideration Shares, being, in aggregate, 1,026,315,786 new Shares (subject to adjustment in accordance with the terms of the Offshore Acquisition Agreement) and representing the total number of new Shares to be issued by the Company to the Sellers to satisfy the First Consideration and the Second Consideration the Shares to be issued by the Company upon the exercise of the Convertible Bonds 16

17 Conversion Period Conversion Price Convertible Bonds Damages Director(s) EGM Enlarged Group First Consideration First Consideration Shares Final Adjusted Relevant Third Consideration Further Adjusted Relevant Third Consideration Golden Eagle the period commencing on the Third Consideration Settlement Date and ending on the day falling six months thereafter (both days inclusive), subject to modification pursuant to the terms of the Offshore Acquisition Agreement HK$0.76, subject to adjustment for, among other things, consolidation, subdivision or reclassification; capitalisation of profits and reserves; capital distributions; rights issues and issuance of options and other standard dilutive events the convertible bonds in the aggregate principal amount of HK$520,000,000 to be issued by the Company to the Sellers to satisfy the Third Consideration pursuant to the Offshore Acquisition Agreement has the meaning given that term in the section headed The Offshore Acquisition Agreement Consideration in this announcement the director(s) of the Company the extraordinary general meeting of the Company to be convened for the purpose of considering, and if thought fit, approving, among other things, the Offshore Acquisition Agreement and the transactions contemplated thereunder, including the issue of the Consideration Shares, the Convertible Bonds and the Conversion Shares, and the PRC Acquisition Agreement and the transactions contemplated thereunder the Group, the Offshore Target Group and the PRC Target Group HK$580,000,000 an aggregate of 763,157,893 new Shares has the meaning given that term in the section headed The Offshore Acquisition Agreement Consideration in this announcement has the meaning given that term in the section headed The Offshore Acquisition Agreement Consideration in this announcement Golden Eagle (Asia) Investment Limited Gram Capital or Gram Capital Limited, a licensed corporation to carry out Type 6 Independent Financial Adviser (advising on corporate finance) regulated activity under the SFO and the independent financial adviser to the Independent Board Committee and Independent Shareholders regarding the Acquisition and the PRC Acquisition Group HK$ the Company and its subsidiaries from time to time Hong Kong dollars, the lawful currency of Hong Kong 17