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. MODERN LAND (CHINA) CO., LIMITED 當代置業 ( 中國 ) 有限公司 (Incorporated in the Cayman Islands with limited liability) (Stock code: 1107) DISCLOSEABLE TRANSACTION IN RELATION TO ACQUISITION OF 80% EQUITY INTEREST IN HUOJIAN REAL ESTATE INVESTMENT DISCLOSEABLE TRANSACTION The Board is pleased to announce that on 29 December 2017, Modern Green Development (an indirect wholly-owned subsidiary of the Company) (as purchaser) entered into the Equity Transfer Agreement with the Vendor, Huojian Real Estate Investment and the Project Company, whereby Modern Green Development agreed to acquire 80% equity interest in the Huojian Real Estate Investment from the Vendor at the consideration of RMB261,006,185.00. On the same day, Modern Green Development, the Vendor, Huojian Real Estate Investment and the Project Company entered in to the Supplemental Agreement, whereby the contingent valuation with respect to the consideration under the Equity Transfer Agreement is RMB54,051,986.80. The maximum of total consideration is RMB315,058,171.80. Huojian Real Estate Investment is currently held by the Vendor and Modern Green Development as to 80% and 20%, respectively. Upon completion of the Acquisition, Huojian Real Estate Investment will become an indirect wholly-owned subsidiary of the Company and its financial results will be consolidated into the accounts of the Group. LISTING RULES IMPLICATIONS As one or more of the applicable percentage ratios set out in the Listing Rules in respect of the Acquisition under the Equity Transfer Agreement and the Supplemental Agreement is/are more than 5% but less than 25%, the entering into of the Equity Transfer Agreement and the Supplemental Agreement constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules. 1
INTRODUCTION The Board is pleased to announce that on 29 December 2017, Modern Green Development (an indirect wholly-owned subsidiary of the Company) (as purchaser) entered into the Equity Transfer Agreement with the Vendor, Huojian Real Estate Investment and the Project Company, whereby Modern Green Development has agreed to acquire 80% equity interest in Huojian Real Estate Investment from the Vendor at the consideration of RMB261,006,185.00. On the same day, Modern Green Development, the Vendor, Huojian Real Estate Investment and the Project Company entered in to the Supplemental Agreement, whereby the contingent valuation with respect to the consideration under the Equity Transfer Agreement is RMB54,051,986.80. The maximum of total consideration is RMB315,058,171.80. THE EQUITY TRANSFER AGREEMENT The salient terms of the Equity Transfer Agreement are set out as follows: Date 29 December 2017 Parties (1) Modern Green Development (an indirect wholly-owned subsidiary of the Company); (2) the Vendor; (3) Huojian Real Estate Investment; and (4) the Project Company Huojian Real Estate Investment is currently held by the Vendor and Modern Green Development as to 80% and 20%, respectively. To the best knowledge, information and belief of the Board and after making all reasonable enquiries, the Vendor and its ultimate beneficial owner(s) are Independent Third Parties. Subject assets to be acquired As at the date of this announcement, the entire equity interest of Huojian Real Estate Investment was held as to 20% by Modern Green Development and 80% by the Vendor. Huojian Real Estate Investment has a registered capital of RMB100,000,000, which has been fully paid up. Pursuant to the terms of the Equity Transfer Agreement, Modern Green Development agreed to acquire 80% equity interest in Huojian Real Estate Investment from the Vendor. Consideration The consideration payable by Modern Green Development for the Acquisition is RMB261,006,185.00. The consideration was agreed after arm s length negotiations among the parties to the Equity Transfer Agreement on common commercial terms with reference to the operation and financial forecast and the net asset value of the Project Company. 2
After signing of the Equity Transfer Agreement, Modern Green Development will take up the amount due from the Vendor, through Huojian Real Estate Investment, to the Project Company. As agreed in the Equity Transfer Agreement and the Supplemental Agreement, it shall be set off against Modern Green Development s payment obligation of the consideration (including the contingent valuation amount under the Supplemental Agreement). Completion All parties to the Equity Transfer Agreement shall assist Huojian Real Estate Investment to make application to the relevant administration of industry and commerce for the registration of the equity transfer within twenty (20) Business Days from the day when the registration is available to be made. The procedure of the registration of the transfer of 80% equity interest in Huojian Real Estate Investment shall be completed within forty (40) Business Days from the date of the Equity Transfer Agreement. The completion of the Acquisition shall take place on the day when Modern Green Development is registered as the holder of the 80% equity interest of Huojian Real Estate Investment and the new business license is issued to Huojian Real Estate Investment, or relevant evidential documents are issued in relation to the equity transfer. Huojian Real Estate Investment is currently held by the Vendor and Modern Green Development as to 80% and 20%, respectively. Upon completion of the Acquisition, Huojian Real Estate Investment will become an indirect wholly-owned subsidiary of the Company and its financial results will be consolidated into the accounts of the Group. THE SUPPLEMENTAL AGREEMENT Date 29 December 2017 Parties (1) Modern Green Development (an indirect wholly-owned subsidiary of the Company); (2) the Vendor; (3) Huojian Real Estate Investment; and (4) the Project Company Contingent valuation Subject to the taxation valuation and payment on the Project Company to be approved by the relevant tax authority, the investment return to be recognised by the Vendor from the Project Company can be in the maximum amount of RMB54,051,986.80 in relation to its 80% equity interest of Huojian Real Estate Investment, which shall be the contingent valuation with respect to the consideration under the Equity Transfer Agreement. 3
If the contingent valuation cannot be recognised (in whole or in part), the Vendor shall return all or part of the contingent valuation amount, calculated based on the final profit of the Project Company, to Modern Green Development. INFORMATION ABOUT THE PARTIES TO THE EQUITY TRANSFER AGREEMENT The Company and Modern Green Development The Company is incorporated in the Cayman Islands with limited liability and its Shares have been listed on the Main Board of the Stock Exchange. The Group is a property developer focused on the development on green, energy-saving and eco-friendly residences in the PRC. Modern Green Development is a company established in the PRC with limited liability and an indirect wholly-owned subsidiary of the Company. The Vendor The Vendor is a limited partnership established in the PRC. It is principally engaged in investment in non-securities businesses. Huojian Real Estate Investment and the Project Company Huojian Real Estate Investment is a company established in the PRC with limited liability. As at the date of this announcement, it had a registered capital of RMB100,000,000 which has been fully paid up. It is principally engaged in property development in the PRC. Set out below is the unaudited financial information of Huojian Real Estate Investment for the two years ended 31 December 2015 and 2016 prepared according to the PRC accounting standards: For the year ended 31 December 2016 RMB For the year ended 31 December 2015 RMB Net loss before tax 57,070,240 129,346 Net loss after tax 57,070,240 129,346 The total asset value and net liability value of Huojian Real Estate Investment as at 30 November 2017 was approximately RMB2,664,400,000 and RMB28,000,000 respectively. As at the date of this announcement, Huojian Real Estate Investment holds the entire equity interest in the Project Company, which is principally engaged in property development and sales in the PRC and is the project company of Modern MOMΛ City of Future (Hefei) project. The total GFA of the project is 460,037 square meter. 4
REASONS FOR AND BENEFIT OF ENTERING INTO THE EQUITY TRANSFER AGREEMENT The Group is a property developer focused on the development on green, energy-saving and ecofriendly residences in the PRC. The Acquisition will enable the Group to hold the entire equity interest of Huojian Real Estate Investment, which, through the Project Company, holds the Modern MOMΛ City of Future (Hefei) project. The Acquisition will enable the Company to maximise its autonomy to manage its operations and enhance the profit return of its property development project. The Board is of the view that the terms of the Equity Transfer Agreement are on normal commercial terms after arm s length negotiations among the parties, fair and reasonable and in the interests of the Company and the Shareholders as a whole. LISTING RULES IMPLICATIONS As one or more of the applicable percentage ratios set out in the Listing Rules in respect of the Acquisition under the Equity Transfer Agreement and the Supplemental Agreement is/are more than 5% but less than 25%, the entering into of the Equity Transfer Agreement and the Supplemental Agreement constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules. DEFINITIONS In this announcement, the following expressions have the meanings set out below unless the context requires otherwise. Acquisition Board Business Day Company the proposed acquisition of the 80% of the equity interest of Huojian Real Estate Investment pursuant to the terms and conditions of the Equity Transfer Agreement the board of Directors a day on which banks in Hong Kong and PRC are open for normal business (excluding Saturday, Sunday, public holidays in Hong Kong or PRC or days on which a tropical cyclone signal number 8 or above or black rain storm warning is hoisted at any time between 9:00 a.m. to 12:00 noon and which has not been lowered by 12:00 noon on the same day) Modern Land (China) Co., Limited, a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Main Board of the Stock Exchange 5
Directors Equity Transfer Agreement GFA Group Hong Kong HK$ Huojian Real Estate Investment Independent Third Party(ies) the directors of the Company the equity transfer agreement dated 29 December 2017 entered into among Modern Green Development (as purchaser), the Vendor, Huojian Real Estate Investment and the Project Company relating to the Acquisition gross floor area the Company and its subsidiaries the Hong Kong Special Administrative Region of the PRC Hong Kong dollars, the lawful currency of Hong Kong Huojian Real Estate Investment (Beijing) Co., Ltd., a company established in the PRC with limited liability third party(ies) independent of the Company and are not connected persons (as defined under the Listing Rules) of the Company Land the parcel of the land situated in Xinzhan Comprehensive Development Experiment Zone, Hefei, Anhui Province, the PRC Listing Rules Modern Green Development PRC the Rules Governing the Listing of Securities on the Stock Exchange Modern Green Development Co., Ltd., a company established in the PRC with limited liability and an indirect wholly-owned subsidiary of the Company as at the date of this announcement the People s Republic of China Project Company Hefei Modern Yinghe Real Estate Co., Ltd., a company established in the PRC with limited liability RMB Shareholders Shares Stock Exchange Supplemental Agreement Renminbi, the lawful currency of the PRC holders of the Shares the shares of the Company The Stock Exchange of Hong Kong Limited the supplemental agreement dated 29 December 2017 to the Equity Transfer Agreement entered into among Modern Green Development, the Vendor, Huojian Real Estate Investment and the Project Company 6
Vendor Jiaxing Lvxin Equity Investment Fund Enterprise (LLP), a limited partnership established in the PRC % per cent. In this announcement, the English names of the PRC entities are translation of their Chinese names, and are included herein for identification purpose only. In the event of any inconsistency, the Chinese names shall prevail. Hong Kong, 29 December 2017 By order of the Board Modern Land (China) Co., Limited Zhang Peng President and Executive Director As at the date of this announcement, the Board comprises ten Directors, namely executive Directors: Mr. Zhang Lei, Mr. Zhang Peng and Mr. Chen Yin; non-executive Directors: Mr. Fan Qingguo, Mr. Chen Zhiwei and Mr. Chen Anhua; and independent non-executive Directors: Mr. Qin Youguo, Mr. Cui Jian, Mr. Hui Chun Ho, Eric and Mr. Zhong Bin. 7