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. MASTER GLORY GROUP LIMITED 凱華集團有限公司 (Carrying on business in Hong Kong as 275 ) (Incorporated in Bermuda with limited liability) (Stock Code: 275) DISCLOSEABLE TRANSACTION IN RELATION TO DISPOSAL OF 100% INTEREST IN A COMPANY HOLDING PROPERTIES IN HONG KONG After the Stock Exchange trading hours on 14 March 2018, the Vendor (a wholly-owned subsidiary of the Company), the Company (as guarantor of the Vendor) and the Purchaser entered into the Provisional Sale and Purchase Agreement in relation to the Disposal at the cash consideration of HK$196.0 million. The principal assets of the Target Company are the Properties. As one or more of the applicable percentage ratios set out in Rule 14.07 of the Listing Rules exceed 5% but is/are less than 25%, the Disposal constitutes a discloseable transaction for the Company and is subject to the notification and announcement requirements under Chapter 14 of the Listing Rules. The Board is pleased to announce that after the Stock Exchange trading hours on 14 March 2018, the Vendor (a wholly-owned subsidiary of the Company), the Company (as guarantor of the Vendor) and the Purchaser entered into the Provisional Sale and Purchase Agreement in relation to the Disposal at the cash consideration of HK$196.0 million. The principal assets of the Target Company are the Properties. 1
THE PROVISIONAL SALE AND PURCHASE AGREEMENT The principal terms of the Provisional Sale and Purchase Agreement are set out below: Date 14 March 2018 Parties (i) the Vendor; (ii) the Company (as guarantor of the Vendor to guarantee and procure the performance of all obligations of the Vendor under the Provisional Sale and Purchase Agreement); and (iii) the Purchaser To the best of the Directors knowledge, information and belief having made all reasonable enquiries, the Purchaser and its ultimate beneficial owner(s) are third parties independent of the Company and its connected persons (within the meaning of the Listing Rules). The Purchaser is a company incorporated in Hong Kong and its principal business activity is property investments. Assets to be disposed of The Sale Share and the Sale Loan. Consideration The Consideration of the Disposal is HK$196.0 million, which was arrived at after arm s length negotiations between the Vendor and the Purchaser through an independent estate agent with reference to the prevailing market price of similar properties at similar location. The Consideration will be settled in cash in the following manner: (i) (ii) HK$9.75 million payable upon signing of the Provisional Sale and Purchase Agreement as initial deposit; HK$9.85 million shall be paid on or before 23 March 2018 as further deposit; and (iii) the balance of HK$176.4 million shall be paid upon Completion (the Balance of Consideration ). 2
At Completion, the Consideration will be adjusted in accordance with the terms of the Provisional Sale and Purchase Agreement, taking into account, amongst others, the value of the current assets and current liabilities of the Target Company. Based on latest available information, the Company anticipates any adjustment on Consideration shall not exceed HK$0.5 million. Pursuant to the Provisional Sale and Purchase Agreement, the Vendor may utilise the Balance of Consideration or part thereof to redeem the existing mortgage of the Properties on the date of Completion. Conditions Precedents Completion is conditional upon the following: (i) the Purchaser having completed its due diligence investigation on the business, financial, legal and all other aspects of the Target Company and reasonably satisfied with the results thereof; (ii) the Vendor, shall at the Vendor s own cost, procure the Target Company to prove and give a good title to the Properties in accordance with sections 13 and 13A of the Conveyancing and Property Ordinance (Chapter 219 of the Laws of Hong Kong); and (iii) all the representations, undertakings and warranties given by the Vendor under the Provisional Sale and Purchase Agreement (and the Formal Agreement if signed) are and shall remain true, accurate, correct and complete and not misleading in all material respects up to Completion. If any of the foregoing conditions is not fulfilled (or waived by the Purchaser) on or before Completion, the Purchaser shall be entitled to cancel the transaction under the Provisional Sale and Purchase Agreement whereupon all deposits paid shall be returned by the Vendor (without interest, costs or compensation) to the Purchaser forthwith and no party shall have any claim against each other thereafter. Completion Completion shall take place on 10 July 2018. INFORMATION OF THE TARGET COMPANY The Target Company is an indirect wholly-owned subsidiary of the Company whose principal business activity is property investment. It is the registered and beneficial owner of the Properties, being the principal asset of the Target Company. The Properties comprise: (i) the whole 41st Floor including the lavatories and lift lobbies, and (ii) the car parking spaces nos. P3, P4, P5, P6, P7 and P8 on 5th Floor, Montery Plaza, No. 15 Chong Yip Street, Kowloon, Hong Kong. 3
The Properties were acquired by the Group in September 2015 at a total consideration of HK$179.4 million, and have been rented out and classified as investment properties of the Group. The existing tenancy agreement will expiry in June 2018. Set out below is the audited financial information for the Target Company prepared in accordance with Hong Kong Financial Reporting Standard for Private Entities: For the year ended 31 March 2016 2017 HK$ HK$ Net loss before and after taxation 21,310,775 6,943,042 As at 31 March 2017 HK$ Net Liabilities 27,239,817 FINANCIAL EFFECT OF THE DISPOSAL Immediately after Completion, the Target Company will cease to be a subsidiary of the Company and the financial results of the Target Company will no longer be consolidated into the Group s financial statements. The net proceeds (after repayment of existing mortgage loans and interests and deducting relevant commission and expenses) arising from the Disposal of approximately HK$70.6 million will be used for general working capital, including administrative expenses of the Group. The estimated gain on the Disposal will be approximately HK$1.9 million after taking into account the Consideration of HK$196.0 million. REASONS FOR THE DISPOSAL The Company and its subsidiaries are principally engaged in property development, investment and trading, industrial water supply, trading of securities and other strategic investments. The Directors are of the view that the Consideration for the Disposal, representing the prevailing market price of similar properties in the same area, will provide a satisfactory return to the Company, as compared to the original acquisition cost of the Properties of approximately HK$179.4 million. By realising its investment in the Properties, the Group s overall financial position will be strengthened and new investment opportunities will be identified. No specific investment project has been identified as at the date of this announcement. The Board considers that the terms of the Provisional Sale and Purchase Agreement are fair and reasonable and the Disposal is in the interests of the Company and the Shareholders as a whole. 4
GENERAL As one or more of the applicable percentage ratios set out in Rule 14.07 of the Listing Rules exceed 5% but is/are less than 25%, the Disposal constitutes a discloseable transaction for the Company and is subject to the notification and announcement requirements under Chapter 14 of the Listing Rules. DEFINITIONS In this announcement, the following expressions shall have the following meanings unless the context requires otherwise: Board BVI Company Completion Consideration Directors Disposal Formal Agreement Group HK$ Hong Kong Listing Rules the board of Directors the British Virgin Islands Master Glory Group Limited, a company incorporated in Bermuda with limited liability and the issued Shares of which are listed on the main board of the Stock Exchange completion of the Disposal the consideration for the Disposal, being HK$196.0 million (subject to adjustment at Completion), to be satisfied in cash the directors of the Company the proposed disposal of the Sale Share and Sale Loan by the Vendor at the Consideration pursuant to the terms and conditions of the Provisional Sale and Purchase Agreement the formal agreement for sale and purchase in relation to the Disposal if signed by the Vendor and the Purchaser on or before 23 March 2018 pursuant to the Provisional Sale and Purchase Agreement the Company and its subsidiaries Hong Kong dollar(s), the lawful currency of Hong Kong the Hong Kong Special Administrative Region of the PRC the Rules Governing the Listing of Securities on the Stock Exchange 5
PRC Properties Provisional Sale and Purchase Agreement Purchaser Sale Loan Sale Share Share(s) Shareholder(s) Stock Exchange Target Company Vendor the People s Republic of China, which for the purpose of this announcement, shall exclude Hong Kong, Taiwan and the Macau Special Administrative Region the whole 41st floor including the lavatories and lift lobbies, and car parking space nos. P3, P4, P5, P6, P7 and P8 on 5th Floor, Montery Plaza, No. 15 Chong Yip Street, Kowloon, Hong Kong the provisional sale and purchase agreement dated 14 March 2018 and entered into among the Vendor, the Company and the Purchaser in relation to the Disposal Ming Yun (International) Limited all such sum of money advanced by way of loan by the Vendor to the Target Company and due and owing by the Target Company to the Vendor as at Completion the entire issued and paid up share capital of the Target Company ordinary share(s) of HK$0.2 each in the share capital of the Company holder(s) of the Share(s) The Stock Exchange of Hong Kong Limited Smartmedia Ltd., an indirect wholly owned subsidiary of the Company incorporated in BVI with limited liability, which is the registered and beneficial owner of the Properties Precise Skill Investments Limited, a company incorporated in BVI with limited liability, being an indirect wholly owned subsidiary of the Company By order of the Board MASTER GLORY GROUP LIMITED Dr. Yap Allan Chairman Hong Kong, 14 March 2018 6
As at the date of this announcement, the directors of the Company are as follows: Executive Directors: Dr. Yap Allan (Chairman) Mr. Heung Pik Lun, Edmond Mr. Wu Guangsheng Independent Non-executive Directors: Mr. Kwok Ka Lap, Alva Mr. Poon Kwok Hing, Albert Mr. Sin Chi Fai Dr. Wu Chun Wah 7