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. (Incorporated in Hong Kong with limited liability) (Stock Code: 668) ISSUE OF WARRANTS ISSUE OF WARRANTS On 10 June 2015 (after trading hours), the Company entered into the Subscription Agreement with the Subscriber pursuant to which the Warrants will be issued at the issue price of HK$1.00, subject to the Conditions, to the Subscriber. The Warrants are not transferrable. Upon full exercise of the Warrants, 20,000,000 Warrant Shares will be issued, representing (i) approximately 1.570% of the existing issued share capital of the Company of 1,274,038,550 Shares; and (ii) approximately 1.546% of the Company s issued share capital as enlarged by the issue of the Warrant Shares. The Warrant Shares will be issued under the Specific Mandate to be sought at the EGM. The Company will apply to the Stock Exchange for the listing of, and permission to deal in, the Warrant Shares which may fall to be allotted and issued upon exercise of the subscription rights attaching to the Warrants. No listing of the Warrants will be sought on the Stock Exchange or any other stock exchanges. The net proceeds (if any) from the exercise of the Warrants is intended to be used as working capital of the Group. A circular containing further details of the Subscription Agreement, valuation report of the Warrants and the notice of EGM will be despatched to the Shareholders in due course. 1
Shareholders and potential investors should note that the Closing and the issuance of the Warrants are subject to fulfillment of the Conditions under the Subscription Agreement. As the transaction may or may not proceed, Shareholders and potential investors are reminded to exercise caution when dealing in the Shares. This announcement is made pursuant to the Inside Information Provisions (as defined in the Listing Rules), Rule 13.09(2)(a) and Rule 13.28 of the Listing Rules. THE SUBSCRIPTION AGREEMENT On 10 June 2015 (after trading hours), the Company entered into the Subscription Agreement with the Subscriber pursuant to which the Warrants will be issued at the issue price of HK$1.00, subject to the Conditions, to the Subscriber. The Warrants are not transferrable. Subscription Agreement Date : 10 June 2015 (after trading hours) Parties: Issuer : The Company Subscriber : Haitong International Finance Company Limited To the best knowledge, information and belief of the Directors after having made all reasonable enquiries, the Subscriber and its ultimate beneficial owner are not connected persons of the Company and/or any of its associates. Conditions for the Issuance of the Warrants: (a) the passing by the shareholders of the Company in a general meeting of a resolution approving the issue of the Warrants in accordance with the requirements of the Listing Rules; (b) provision to the Subscriber a copy of the listing approval of the Stock Exchange for the approval of the Warrants and the listing of, and permission to deal in, the Warrant Shares; (c) the execution and delivery on or before the Closing Date of all other relevant agreements, certificates and other documents; (d) provision by the Company of all certified copies or originals of all corporate and other consents, approvals or authorisations and the entry into and the performance by the Company of all its obligations under the relevant contracts; and 2
(e) provision to the Subscriber of such written confirmation and/or evidence to its satisfaction that all necessary and applicable fees and expenses as referred to in the fee letter and/or commitment letter related thereto will be duly paid on or before the Closing Date. Save for Conditions (a) and (b), any or all the Conditions may be waived by the Subscriber. If the listing approval is not granted by the Stock Exchange prior to or on the Long Stop Date, the Company shall pay the Subscriber within two Business Days of the Long Stop Date an amount (in lieu of the Warrants) equal to the warrant intrinsic value (which equals to the difference between the closing price of the Shares of the last trading day immediately prior to the Long Stop Date and the Exercise Price), if the Company can provide to the Subscriber an evidence that the Company has applied and procured for the listing approval but such approval is not granted by the Stock Exchange on or before the Long Stop Date, or the parties agreed that it is expected that the listing approval will not be granted by the Stock Exchange by the Long Stop Date, such payment shall be waived by the Subscriber and the Company is not liable to make any such payment to the Subscriber. Upon such payment being received or waived by the Subscriber, the Subscription Agreement shall terminate and none of the parties shall have any claim against each other for costs, damages, compensation or otherwise save for antecedent breaches. Terms of the Warrants The principal terms of the Warrants are summarized below: Issuer : The Company Amount of Warrants to be issued : 20,000,000 Warrants Subscription Rights : The holder of the Warrants attached to the Warrants is entitled to subscribe in aggregate up to 20,000,000 Shares pursuant to the Warrants, and, each Warrant entitles the relevant holder of the Warrant to subscribe for one Share. Exercise Price : HK$0.6975, which the registered holder of such Warrant is entitled to subscribe for each Share upon the exercise in full of the Subscription Rights represented thereby, subject to adjustment in accordance with the Conditions. The Exercise Price represents (i) a discount of approximately 10.58% to the closing price of HK$0.78 per Share as quoted on the Stock Exchange on the Last Trading Day; and (ii) a discount of approximately 11.71% to the average closing price of HK$0.79 per Share as quoted on the Stock Exchange from Thursday, 4 June 2015 to Wednesday, 10 June 2015, both dates inclusive, being the last five consecutive trading days up to and including the Last Trading Day. 3
Adjustment : The Exercise Price is subject to normal adjustment in certain events such as subdivision or consolidation of the Shares, capitalisation issue, capital distribution, rights issue, issue of convertible or exchangeable securities or Shares issue at a price less than 95% of the market price, and purchase and cancellation of securities of the Company. Exercise Period : The subscription rights attaching to the Warrants can be exercised at any time during the 36 month period commencing the date of Closing. Transferability : The Subscription Rights shall not be transferable. Number of Warrant Shares to be issued upon exercise of the Warrants Upon full exercise of the Warrants, a maximum of 20,000,000 Warrant Shares will be issued, representing (i) approximately 1.570% of the existing issued share capital of the Company of 1,274,038,550 Shares; and (ii) approximately 1.546% of the Company s issued share capital as enlarged by the issue of the Warrant Shares. Ranking of the Warrant Shares The Warrant Shares when allotted and issued, will rank pari passu in all respects among themselves and with all other fully paid Shares then in issue. Issue Price and Exercise Price The Issue Price and Exercise Price were determined and agreed after arm s length negotiations between the Company and the Subscriber, taking into account the Group s existing financial position, liquidity of the Shares in the market, the number of Warrant Shares and the recent trading prices of the Shares and the Subscriber will become a strategic Shareholder upon exercise of the Warrants. Exercise Period The subscription rights attaching to the Warrants can be exercised at any time during the 36 month period commencing the date of Closing. 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 Warrants Shares. No listing of the Warrants will be sought on the Stock Exchange or any other stock exchanges. The terms of the Warrants were determined by arm s length negotiation among the parties with reference to the prevailing market conditions. 4
SPECIFIC MANDATE TO ISSUE THE SHARES UNDER THE WARRANTS The issue of the Warrants and the Warrant Shares are subject to the Shareholders approval and will be allotted and issued pursuant to the Specific Mandate to be sought at the EGM. A circular containing further details of the Subscription Agreement, valuation report of the Warrants and the notice of EGM will be despatched to the Shareholders in due course. REASONS FOR THE ISSUANCE OF THE WARRANTS AND USE OF PROCEEDS The Group is principally engaged in the property investment business and financial leasing. The proceeds from the Subscription and full exercise of the Warrants (before deducting all the related costs and expenses) are estimated to be approximately HK$13.95 million. The Board would like to introduce the Subscriber to the Company as a strategic Shareholder. The net proceeds (if any) from the exercise of the Warrants is intended to be used as working capital of the Group. The Board considers that the terms of the Subscription Agreement are on normal commercial terms and are fair and reasonable and in the interest of the Company and the Shareholders as a whole. FUND RAISING EXERCISE BY THE COMPANY IN THE PAST TWELVE MONTHS Save for the fund raising activity mentioned below, the Board confirms that there has not been any fund raising exercise made by the Company in the twelve months immediately preceding the date of this announcement. Date of announcement Event Estimated net proceeds (approximately) Intended use of proceeds Actual use of proceeds as at the Latest Practicable Date 05/12/2014 Issuing of bond in an aggregate principal amount of HK$195,000,000. HK$191.3 million To be used for financing the expansion of the existing business of the Group Used as intended 5
SHAREHOLDING STRUCTURE OF THE COMPANY Set out below is the shareholding structure of the Company (i) as at the date of this announcement; and (ii) immediately after the exercise of the Warrants in full. Immediately after the exercise As at the date of this announcement of the Warrants at the initial Exercise Price in full No. of Shares % No. of Shares % Directors Mr. Lo Siu Yu ( Mr. Lo ) (Note 1) 780,013,018 61.224 780,013,018 60.277 Dr. Zhu Wenhui 10,000 0.000 10,000 0.000 Substantial Shareholders Ms. Chiu Kit Hung (Note 2) 780,013,018 61.224 780,013,018 60.277 Wealthy In Investments Limited (Note 3) 755,013,018 59.261 755,013,018 58.345 Money Success Limited 755,013,018 59.261 755,013,018 58.345 Public Shareholder Subscriber 0 0.000 20,000,000 1.546 Other public shareholders 494,015,532 38.776 494,015,532 38.177 Total 1,274,038,550 100.000 1,294,038,550 100.0000 Notes: (1) 665,013,018 Shares were held by Money Success Limited, a company wholly-owned by Wealthy In Investments Limited, which is in turn wholly-owned by Mr. Lo. 60,000,000 Shares were held by Sino Consult Asia Limited and 30,000,000 Shares were held by Full Brilliant Limited, both are companies wholly-owned by Money Success Limited. 25,000,000 Shares are held jointly with Ms. Chiu Kit Hung, the spouse of Mr. Lo. (2) Ms. Chiu Kit Hung is the spouse of Mr. Lo, who is the Chairman and an executive Director of the Company. (3) Wealthy In Investments Limited is a company wholly-owned by Mr. Lo. (4) 665,013,018 Shares were held by Money Success Limited, a company wholly-owned by Wealthy In Investments Limited, which is in turn wholly-owned by Mr. Lo. 60,000,000 Shares were held by Sino Consult Asia Limited and 30,000,000 Shares were held by Full Brilliant Limited, both are companies wholly-owned by Money Success Limited. 6
GENERAL Upon full exercise of the Warrants, a maximum of 20,000,000 Warrant Shares will be issued, representing (i) approximately 1.570% of the existing issued share capital of the Company of 1,274,038,550 Shares; and (ii) approximately 1.546% of the Company s issued share capital as enlarged by the issue of the Warrant Shares. The Warrant Shares will be issued under the Specific Mandate to be sought at the EGM. Shareholders and potential investors should note that the Closing and the issuance of the Warrants are subject to fulfillment of the Conditions under the Subscription Agreement. As the transaction may or may not proceed, Shareholders and potential investors are reminded to exercise caution when dealing in the Shares. DEFINITIONS In this announcement, unless the context otherwise requires, the following terms shall have the following meanings: Board Business Day Closing Closing Date Company Conditions connected person(s) Director(s) EGM the board of Directors means any day (excluding Saturday, Sunday and public holidays) on which banks in Hong Kong are open for business the closing of the Subscription the date of Closing under the terms of the Subscription Agreement Dowell Property Holdings Limited, a company incorporated in Hong Kong with limited liability and the Shares of which are listed on the Stock Exchange conditions precedents which shall be fulfilled or waived at or before Closing has the meaning ascribed thereto under the Listing Rules the director(s) of the Company the extraordinary general meeting of the Company to be convened and held to approve, among others, the Subscription Agreement and the Specific Mandate 7
Exercise Price Group HK$ Hong Kong Issue Price Last Trading Day Listing Rules Long Stop Date Share(s) Shareholder(s) Specific Mandate Stock Exchange Subscriber Subscription Subscription Agreement Subscription Rights HK$0.6975, at which the holder of the Warrants may subscribe for new share(s) the Company and its subsidiaries Hong Kong dollars, the lawful currency of Hong Kong Hong Kong Special Administrative Region of the PRC means the issue price of the Warrants which is in aggregate amount of HK$1.00 10 June 2015, being the last trading day of the Shares on the Stock Exchange before the release of this announcement the Rules Governing the Listing of Securities on the Stock Exchange means 31 August 2015 or such other date as agreed by the Company and the Subscriber ordinary share(s) of the Company the holder(s) of the Share(s) the specific mandate required to be granted to the Directors by the Shareholders at a general meeting for allotment and issue of the Warrant and the Warrant Shares The Stock Exchange of Hong Kong Limited Haitong International Finance Company Limited, a company incorporated in Hong Kong the subscription of the Warrants by the Subscribers the subscription agreement dated 10 June 2015 entered into by the Company and the Subscriber in relation to the subscription of Warrants means the rights of the holder of the Warrants attached to the Warrants to subscribe in aggregate up to 20,000,000 Shares pursuant to the Warrants, and, in relation to each Warrant, means the right of the relevant holder of the Warrant to subscribe for one Share 8
Warrant Share(s) Warrant(s) Share(s) to be issued upon the exercise of the subscription rights attaching to the Warrants means the 20,000,000 unlisted warrant(s) carrying the Subscription Rights to be issued by the Company to the Subscriber % or per cent. percentage or per centum By order of the Board Dowell Property Holdings Limited Cho Chun Wai Company Secretary Hong Kong, 10 June 2015 As at the date of this announcement, the Board comprises Mr. Lo Siu Yu (Chairman), Ms. Luo Shaoying (Vice Chairman) and Mr. Chen Yang (Chief Executive Officer) as executive Directors; Mr. Wang Xiaobo and Mr. Qin Hong as non-executive Directors; and Mr. Chan Ying Kay, Dr. Zhu Wenhui and Mr. Wang Jin Ling as independent non-executive Directors. 9