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 purposes only and does not constitute an invitation or a solicitation of an offer to acquire, purchase or subscribe for securities or an invitation to enter into an agreement to do any such things, nor is it calculated to invite any offer to acquire, purchase or subscribe for any securities. This announcement is not for distribution, directly or indirectly, in or into the United States. This announcement does not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States or any other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No securities may be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Any public offering of securities to be made in the United States will be made by means of a prospectus. Such prospectus will contain detailed information about the company making the offer and its management and financial statements. No public offer of securities is to be made by the Company in the United States. CHINA PROPERTIES GROUP LIMITED (Incorporated in the Cayman Islands with limited liability) (Stock Code: 1838) ISSUANCE OF USD226,000,000 15.0% SENIOR NOTES DUE 2021 BY CHEERGAIN GROUP LIMITED The Board is pleased to announce that on October 11, 2018, the Issuer, Mr. Wong Sai Chung as personal guarantor, the Subsidiary Guarantors and certain investors have entered into one or more subscription agreements in connection with the private placement of USD226,000,000 15.0% senior notes due 2021 issued by Cheergain Group Limited, a wholly owned subsidiary of China Properties Group Limited. The Offer Price of the Notes will be 100.0% of the principal amount of the Notes. 1
The estimated net proceeds of the proposed issue of the Notes, after deduction of the fees and other estimated expense payable in connection with this offering, will amount to approximately USD220.5 million; and the Issuer intends to use the net proceeds to refinance the Group s existing indebtedness. The Issuer intends to submit an application to The International Stock Exchange Authority Limited for the listing of and permission to deal in the Notes on the Official List of The International Stock Exchange. Admission of the Notes to the Official List of The International Stock Exchange is not to be taken as an indication of the merits of the Company, the Issuer, the Notes, the Personal Guarantee, the Personal Guarantor, the Subsidiary Guarantees or the Subsidiary Guarantors. The International Stock Exchange Authority Limited assumes no responsibility for the correctness of any of the statements made or opinions expressed or reports contained herein. The issue of the Notes is subject to completion. Shareholders and the public are reminded to exercise caution when dealing in the securities of the Company. THE SUBSCRIPTION AGREEMENTS Date October 11, 2018 Parties (a) The Issuer as the issuer; (b) Mr. Wong Sai Chung as the personal guarantor; (c) The Subsidiary Guarantors as guarantors of the Issuer s obligations under the Notes; and (d) The subscribers of the Notes. The Notes will only be offered and sold outside the United States in compliance with Regulation S under the U.S. Securities Act. None of the Notes will be offered to the public in Hong Kong and none of the Notes will be placed with any connected persons of the Company. Principal terms of the Notes Issuer Cheergain Group Limited Notes USD226,000,000 aggregate principal amount of 15.0% Senior Notes due 2021 (the Notes ). Offering Price 100.0% of the principal amount of the Notes. Maturity Date October 15, 2021. 2
Interest The Notes will bear interest from and including October 15, 2018 at the rate of 15.0% per annum, payable semi-annually in arrears. Interest Payment Dates April 15 and October 15 of each year, commencing April 15, 2019. Ranking of the Notes The Notes will be:. general obligations of the Issuer;. senior in right of payment to any existing and future obligations of the Issuer expressly subordinated in right of payment to the Notes;. at least pari passu in right of payment with all unsecured, unsubordinated Indebtedness of the Issuer (subject to any priority rights of such unsubordinated Indebtedness pursuant to applicable law);. guaranteed by the Subsidiary Guarantors on a senior basis, subject to limitations;. guaranteed by the Personal Guarantor on a senior basis, subject to limitations;. effectively subordinated to other secured obligations of the Issuer and the Subsidiary Guarantors (other than permitted pari passu secured indebtedness), to the extent of the value of the assets serving as security therefor; and. effectively subordinated to all existing and future obligations of the non-guarantor subsidiaries of the Issuer. Subject to certain limitations, the Notes will be secured by the Collateral and will:. be entitled to a first priority lien on the Collateral (subject to any permitted liens) shared on a pari passu basis with the holders of the 2013 Notes and any other creditors with respect to permitted pari passu secured indebtedness; 3
. rank effectively senior in right of payment to unsecured obligations of the Issuer with respect to the value of the Collateral pledged by the Issuer securing the Notes (subject to any priority rights of such unsecured obligations pursuant to applicable law); and. rank effectively senior in right of payment to unsecured obligations of the Subsidiary Guarantor Pledgors to the extent of the Collateral charged by each Subsidiary Guarantor Pledgor securing the Notes (subject to any priority rights of such unsecured obligations pursuant to applicable law). Personal Guarantee Ranking of the Personal Guarantee The Personal Guarantor, who is our managing director and a controlling shareholder of the Company, will guarantee the due and punctual payment of the principal of, premium, if any, and interest on, and all other amounts payable under, the Notes. The Personal Guarantor is a controlling shareholder of the Company, which in turn holds all of the equity interests in the Issuer. The Personal Guarantee of the Personal Guarantor will be:. a general obligation of the Personal Guarantor;. effectively subordinated to secured obligations of such Personal Guarantor, to the extent of the value of the assets serving as security therefor;. senior in right of payment to all future obligations of the Personal Guarantor expressly subordinated in right of payment to the Personal Guarantee; and at least pari passu in right of payment with all unsecured, unsubordinated Indebtedness of the Personal Guarantor (subject to any priority rights of such unsubordinated Indebtedness pursuant to applicable law). Subsidiary Guarantees Each of the Subsidiary Guarantors will, jointly and severally, guarantee the due and punctual payment of the principal of, premium, if any, and interest on, and all other amounts payable under, the Notes. A Subsidiary Guarantee may be released in certain circumstances. 4
The initial Subsidiary Guarantors will consist of all of the Restricted Subsidiaries other than those Restricted Subsidiaries organized under the laws of the PRC. All of the initial Subsidiary Guarantors are holding companies or special purpose companies that do not have significant operations. Any future Restricted Subsidiary (other than subsidiaries organized under the laws of the PRC) will provide a guarantee of the Notes as soon as practicable and in any event within 30 days after becoming a Restricted Subsidiary. Ranking of Subsidiary Guarantees The Subsidiary Guarantee of each Subsidiary Guarantor will be:. a general obligation of such Subsidiary Guarantor;. senior in right of payment to all future obligations of such Subsidiary Guarantor expressly subordinated in right of payment to such Subsidiary Guarantee; and. at least pari passu in right of payment with all unsecured, unsubordinated Indebtedness of such Subsidiary Guarantor (subject to any priority rights of such unsubordinated Indebtedness pursuant to applicable law). Subsidiary Guarantees of each Subsidiary Guarantor Pledgor:. will be entitled to a first priority lien on the Collateral (subject to any permitted liens) pledged by such Subsidiary Guarantor Pledgor shared on a pari passu basis with any other creditors with respect to permitted pari passu secured indebtedness; and. will rank effectively senior in right of payment to the unsecured obligations of such Subsidiary Guarantor Pledgor with respect to the value of the Collateral securing such Subsidiary Guarantee (subject to any priority rights of such unsecured obligations pursuant applicable law). 5
Intercreditor Agreement On or prior to the issue date of the Notes, the Trustee on behalf of the holders of the Notes will execute a joinder agreement to the Intercreditor Agreement to accede as a secured party to the Intercreditor Agreement. Optional Redemption At any time and from time to time on or after April 15, 2020, the Issuer may redeem the Notes, in whole or in part, at certain redemption prices, plus accrued and unpaid interest to (but not including) the redemption date. At any time prior to April 15, 2020, the Issuer may at its option redeem the Notes, in whole but not in part, at a redemption price equal to 100% of the principal amount of the Notes plus the applicable premium as of, and accrued and unpaid interest, if any, to (but not including) the redemption date. Redemption at the Option of Holders of the Notes Redemption Upon a Delisting Event Repurchase of Notes Upon a Change of Control Redemption for Taxation Reason The Issuer shall, at the option of any holder of the Notes, repurchase all of the Notes held by such holder at any time on or after April 15, 2020 at 100% of the principal amount of such Notes plus accrued and unpaid interest, if any, to (but not including) the repurchase date. Upon the occurrence of a delisting event, the Issuer shall, at the option of any holder of the Notes, repurchase all of the Notes held by such holder at 101% of the principal amount of such Notes plus accrued and unpaid interest, if any, to (but not including) the repurchase date. Upon the occurrence of a Change of Control, the Issuer will make an offer to repurchase all outstanding Notes at a purchase price equal to 101% of their principal amount plus accrued and unpaid interest, if any, to (but not including) the purchase date. Subject to certain exceptions, the Issuer may redeem the Notes, as a whole but not in part, at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to (but not including) the date fixed by the Issuer for redemption, if the Issuer, the Personal Guarantor or a Subsidiary Guarantor would become obligated to pay certain additional amounts as a result of certain changes in specified tax laws or certain other circumstances. 6
Covenants The Notes, the Indenture, the Personal Guarantee and the Subsidiary Guarantees will limit the Issuer s ability and the ability of its Restricted Subsidiaries to, among other things:. incur or guarantee additional indebtedness and issue disqualified stock or preferred stock;. declare dividends on its capital stock or purchase or redeem capital stock;. make investments or other specified restricted payments; issue or sell capital stock of restricted subsidiaries; guarantee indebtedness of restricted subsidiaries;. sell assets;. create liens;. enter into sale and leaseback transactions;. enter into agreements that restrict restricted subsidiaries ability to pay dividends, transfer assets or make intercompany loans;. enter into transactions with shareholders or affiliates; and. effect a consolidation or merger. Transfer Restrictions Form, Denomination and Registration Book-Entry Only The Notes will not be registered under the U.S. Securities Act or under any state securities laws of the United States and will be subject to customary restrictions on transfer and resale. The Notes will be issued only in fully registered form, without coupons, in minimum denominations of USD200,000 and integral multiples of USD1,000 in excess thereof and will be initially represented by a global note registered in the name of a nominee of a common depositary for Euroclear and Clearstream. The Notes will be issued in book-entry form through the facilities of Euroclear and Clearstream for the accounts of its participants. 7
Delivery of the Notes The Issuer expects to deliver the Notes against payment in same-day funds on or about October 15, 2018. Listing and Trading Application will be made to The International Stock Exchange Authority Limited for the listing of and permission to deal in the Notes on the Official List of The International Stock Exchange. Governing Law The Notes and the Indenture will be governed by and will be construed in accordance with the laws of the State of New York. The Security Documents are, or will be, governed by the laws of the British Virgin Islands or Hong Kong, as the case may be. Reasons for the Proposed issue of the Notes The Issuer intends to use the net proceeds of the Notes to refinance the Group s existing indebtedness. DEFINITIONS In this announcement, the following expressions shall have the meanings set out below unless the context requires otherwise: 2013 Notes the 13.50% Senior Notes due 2018 issued by the Company Board Collateral Collateral Agent the board of Directors has the meaning ascribed to it under the Indenture Citicorp International Limited Company China Properties Group Limited, an exempted company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the main board of the HKSE connected person Directors Group HKSE Hong Kong has the meaning ascribed to it under the Listing Rules the directors of the Company the Company and its subsidiaries The Stock Exchange of Hong Kong Limited the Hong Kong Special Administrative Region of the People s Republic of China 8
Indenture the written agreement among the Issuer, the Personal Guarantor, the Subsidiary Guarantors (as guarantors) and China Construction Bank (Asia) Corporation Limited (as trustee) that specifies the terms of the Notes including the interest rate of the Notes and the maturity date Intercreditor Agreement the intercreditor agreement dated October 22, 2010 among the Company, the Issuer, the Subsidiary Guarantor Pledgors, the Collateral Agent, the 2013 Notes trustee, among others. The Intercreditor Agreement provides, among other things, that the security interests created over the Collateral will be shared on a pari passu basis among the holders of the 2013 Notes and any other creditors with respect to permitted pari passu secured indebtedness Issuer Cheergain Group Limited, a limited liability company incorporated in the British Virgin Islands and wholly owned by the Company Listing Rules Notes Offer Price Personal Guarantee Personal Guarantor Proposed Private Placement Subsidiary Guarantees Subsidiary Guarantor Pledgors Subsidiary Guarantors the Rules Governing the Listing of Securities on the HKSE the USD senior notes to be issued by the Issuer subject to the terms and conditions of the Subscription Agreement the final price at which the Notes will be sold the guarantee provided by the Personal Guarantor in respect of the proposed issue of the Notes by the Issuer Mr. Wong Sai Chung the proposed private placement to be offered outside the United States to non-u.s. persons in compliance with Regulation S of the U.S. Securities Act by Cheergain Group Limited the guarantees provided by certain Subsidiary Guarantors in respect of the proposed issue of the Notes by the Issuer Subsidiary Guarantors that pledge Collateral to secure the obligations of the Issuer under the Notes and the Indenture certain of the Issuer s existing subsidiaries that will guarantee the Notes on the issue date of the Notes 9
USD U.S. Securities Act United states dollars the United States Securities Act of 1933, as amended By order of the Board CHINA PROPERTIES GROUP LIMITED Wang Shih Chang, George Chairman October 11, 2018 As at the date of this announcement, the Board of the Company comprises Dr. Wang Shih Chang, George, Mr. Wong Sai Chung and Mr. Xu Li Chang as executive directors, Mr. Kwan Kai Cheong as non-executive director and Mr. Warren Talbot Beckwith, Mr. Luk Koon Hoo, Dr. Garry Alides Willinge and Mr. Cheng Chaun Kwan, Michael as independent non-executive directors. 10