HSIN CHONG CONSTRUCTION GROUP LTD.

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 is for information purposes only and does not constitute or form a part of an invitation or 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. The securities referred to herein have not been and will not be registered under the U.S. Securities Act or the laws of any state of the United States or other jurisdiction. The securities are being offered and sold outside the United States in an offshore transaction in reliance on Regulation S under the U.S. Securities Act and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable state laws. This announcement and the information contained herein is not for distribution, directly or indirectly, in or into the United States. No public offering of the securities referred to herein is being or will be made in the United States. HSIN CHONG CONSTRUCTION GROUP LTD. * (Incorporated in Bermuda with limited liability) (Stock Code: 00404) ISSUANCE OF UP TO US$130 MILLION 6% CONVERTIBLE BONDS DUE 2017 The Board is pleased to announce that on 3 November 2015, the Company entered into the Subscription Agreement with the Sole Manager pursuant to which, on the terms and subject to the conditions of the Subscription Agreement, the Company has agreed to issue, and the Sole Manager has agreed to subscribe and pay for the Convertible Bonds in the aggregate principal amount of US$100 million. In addition, the Company has granted the Sole Manager an option to subscribe for up to an additional US$30 million in aggregate principal amount of Convertible Bonds (the Option Bonds ) at any time on or before the 14th day following the Closing Date. The option is exercisable, in whole or in part, on one or more occasions by a written notice given to the Company by the Sole Manager at least three business days before the Option Closing Date. 1

2 The initial Conversion Price (subject to adjustment) is HK$1.00, representing (i) approximately 10% premium over the closing price of the Shares as quoted on the Stock Exchange on the Last Trading Date; (ii) approximately 9% premium over the five-day average closing price of the Shares over the five consecutive Trading Days up to and including the Last Trading Date; and (iii) approximately 9% premium over the average closing price of the Shares over the ten consecutive Trading Days up to and including the Last Trading Date. Assuming full conversion of the Convertible Bonds at the initial Conversion Price of HK$1.00 per Share, the Convertible Bonds (not including the Option Bonds) will be convertible into 775,020,000 Shares (subject to adjustment), representing approximately 14.94% of the issued share capital of the Company as at the date of this announcement and approximately 13.00% of the issued share capital of the Company as enlarged by the issue of such 775,020,000 Shares. The Conversion Shares will be allotted and issued by the Company pursuant to the general mandate granted to the Directors at the annual general meeting of the Company held on 22 May Assuming full conversion of the Convertible Bonds at the initial Conversion Price of HK$1.00 per Share, the Convertible Bonds (including the Option Bonds) will be convertible into 1,007,526,000 Shares (subject to adjustment), representing approximately 19.42% of the issued share capital of the Company as at the date of this announcement and approximately 16.26% of the issued share capital of the Company as enlarged by the issue of such 1,007,526,000 Shares. The Conversion Shares will be allotted and issued by the Company pursuant to the general mandate granted to the Directors at the annual general meeting of the Company held on 22 May The Company intends to use the net proceeds for refinancing the Group s debts and provision of working capital for its general corporate purposes. It is intended that the Convertible Bonds will be listed on the Stock Exchange and the Company will use commercially reasonable endeavours to obtain the listing of the Convertible Bonds on the Stock Exchange. The Company will apply to the Stock Exchange for the listing of, and permission to deal in, the Conversion Shares. Completion of the Subscription Agreement is subject to fulfilment, or waiver, of certain conditions. In addition, the Subscription Agreement may be terminated upon the occurrence of certain events. Please refer to the section headed The Subscription Agreement below for further information. As the Subscription Agreement may or may not be completed, Shareholders and prospective investors are reminded to exercise caution when dealing in the Shares. 2

3 The Board is pleased to announce that on 3 November 2015, the Company entered into the Subscription Agreement with the Sole Manager pursuant to which, on the terms and subject to the conditions of the Subscription Agreement, the Company has agreed to issue, and the Sole Manager has agreed to subscribe and pay for the Convertible Bonds in the aggregate principal amount of US$100 million (the Firm Bonds ). In addition, the Company has granted the Sole Manager an option to subscribe for up to an additional US$30 million in aggregate principal amount of Convertible Bonds (the Option Bonds ) at any time on or before the 14th day following the Closing Date. The option is exercisable, in whole or in part, on one or more occasions by a written notice given to the Company by the Sole Manager at least three business days before the Option Closing Date. THE SUBSCRIPTION AGREEMENT Date 3 November 2015 Parties (a) the Company as the issuer; and (b) China Merchants Securities (HK) Co., Limited as the sole manager in respect of the offer and sale of the Convertible Bonds. To the best of the Directors knowledge, information and belief, having made all reasonable enquiries, as at the date of this announcement, the Sole Manager and its ultimate beneficial owner(s) are third parties independent of and are not connected persons (as defined under the Listing Rules) of the Company. The Convertible Bonds have not been, and will not be, registered under the U.S. Securities Act. The Convertible Bonds will only be offered outside the United States in an offshore transaction in compliance with Regulation S under the U.S. Securities Act and will not be offered or sold within the United States (as defined in Regulation S under the U.S. Securities Act). None of the Convertible Bonds will be offered to the public in Hong Kong or be placed to any connected person of the Company. The Company will promptly notify the Stock Exchange if it becomes aware of any dealings in the Convertible Bonds by any connected person of the Company. 3

4 The Sole Manager may, to the extent permitted by applicable laws and directives, overallot and effect transactions in any over-the-counter market or otherwise in connection with the distribution of the Convertible Bonds with a view to supporting the market price of the Convertible Bonds and/or the Shares at a level higher than that which might otherwise prevail in the open market, but in doing so the Sole Manager shall act as principal and not as agent of the Company and any loss resulting from over-allotment or stabilisation shall be borne, and any profit arising therefrom shall be beneficially retained, by the Sole Manager. Conditions Precedent The obligations of the Sole Manager to subscribe and pay for, and the obligations of the Company to issue, the Convertible Bonds are subject to the following conditions (the Conditions Precedent ) to the satisfaction of the Sole Manager: (a) (b) (c) the Sole Manager shall be satisfied (acting reasonably and in good faith) with the results of its due diligence investigations with respect to the Company and its Subsidiaries and the form and content of the Offering Circular; the Trust Deed and the Agency Agreement, each in a form reasonably satisfactory to the Sole Manager, shall have been executed by all parties thereto on or prior to the Closing Date; the Stock Exchange shall have agreed, subject to any conditions reasonably satisfactory to the Sole Manager, to list the Convertible Bonds and the new Shares upon conversion of the Convertible Bonds (or, in each case, the Sole Manager being satisfied that such listing will be granted); (d) the Stock Borrow Agreement shall be in full force and effect, no default shall have occurred thereunder, and the Share Lender shall have delivered all the Shares deliverable to the Sole Manager thereunder (it being acknowledged that the Company is not a party to the Stock Borrow Agreement and shall have no obligations or liabilities thereunder); (e) (f) lock-up letters satisfactory to the Sole Manager shall have been executed by Dr. Wilfred Wong Ying Wai, Ms. Ma Kwing, Pony and Mr. Lin Zhuo Yan and shall remain in full force and effect, whereby Dr. Wilfred Wong Ying Wai, Ms. Ma Kwing, Pony and Mr. Lin Zhuo Yan undertake not to sell any Shares or enter into other transactions with a similar effect for a period from the date of the Subscription Agreement up to 90 days after the Closing Date or (if later) the Option Closing Date (if any), and no default shall have occurred thereunder (it being acknowledged that the Company is not a party to the lockup letters and shall have no obligations or liabilities thereunder); on the Publication Date, the Closing Date and the Option Closing Date (if any), there shall have been delivered to the Sole Manager comfort letters, dated the Publication Date, the Closing Date and the Option Closing Date, from the auditor to the Company, in a form satisfactory to the Sole Manager; 4

5 (g) on or prior to the Closing Date and the Option Closing Date (if any), there shall have been delivered to the Sole Manager, legal opinions dated the Closing Date and the Option Closing Date (if any), of: legal advisers to the Company as to Bermuda law; legal advisers to the Sole Manager as to PRC law; legal advisers to the Sole Manager as to English law; and such resolutions, consents, authorities and documents relating to the issue of the Convertible Bonds as the Sole Manager may require; (h) at the Closing Date and the Option Closing Date (if any): the representations and warranties of the Company shall be true, accurate and correct in all respects at, and as if made on, such date; the Company shall have performed all of its obligations expressed to be performed on or before such date; there shall have been delivered to the Sole Manager a certificate confirming no material adverse change, dated as of such date, of a duly authorised officer of the Company to such effect; and (i) at the Closing Date and the Option Closing Date (if any) there shall not have occurred any change, or any development or event reasonably likely to involve a prospective change, in the condition (financial or other), prospects, operations, business or properties of the Company or its Subsidiaries, which, in the opinion of the Sole Manager, is material and adverse and which makes it, in the opinion of the Sole Manager, impracticable to market the Convertible Bonds on the terms and in the manner contemplated in the Subscription Agreement. The Sole Manager may, at its discretion and upon such terms as it thinks fit, waive compliance with the whole or any part of the Conditions Precedent other than conditions (b) and (c) above. Termination Notwithstanding anything contained in the Subscription Agreement, the Sole Manager may, by notice to the Company given at any time prior to payment of the net subscription monies for the Firm Bonds or the Option Bonds (if any) to the Company, terminate the Subscription Agreement in any of the following circumstances: 5

6 (a) (b) if there shall have come to the notice of the Sole Manager any breach of, or any event rendering untrue or incorrect in any respect, any of the warranties and representations contained in the Subscription Agreement or any failure to perform any of the Company s undertakings or agreements in the Subscription Agreement; if any of the Conditions Precedent has not been satisfied or waived by the Sole Manager; (c) if there shall have occurred any change, or any development involving a prospective change, in national or international monetary, financial, political or economic conditions or currency exchange rates or foreign exchange controls which would in the Sole Manager s view (after consultation with the Company to the extent reasonably practicable) be likely to prejudice materially the success of the issue of the Convertible Bonds or the distribution of the Convertible Bonds or dealings in the Convertible Bonds in the secondary market; (d) if there shall have occurred a general moratorium on commercial banking activities in the PRC, the United States or Hong Kong by any New York State, United States Federal or Hong Kong authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States, or Hong Kong which would in the Sole Manager s view (after consultation with the Company to the extent reasonably practicable) be likely to prejudice materially the success of the offering of the Convertible Bonds and distribution of the Convertible Bonds or dealings in the Convertible Bonds in the secondary market; (e) (f) if there shall have occurred an outbreak or escalation of hostilities or act of terrorism which would in the Sole Manager s view (after consultation with the Company to the extent reasonably practicable) be likely to prejudice materially the offering of the Convertible Bonds or the distribution of the Convertible Bonds or dealings in the Convertible Bonds in the secondary market; or if there shall have occurred any of the following: (i) a suspension or material limitation of trading in securities generally on the Shanghai Stock Exchange, the New York Stock Exchange, the Nasdaq Stock Market, Inc. or the Stock Exchange; (ii) a suspension in trading in the Company s securities on the Stock Exchange; or (iii) a change or a development involving a prospective change in taxation that may adversely affect the Company, the Convertible Bonds or the Shares to be issued upon conversion of the Convertible Bonds, which would in the Sole Manager s view (after consultation with the Company to the extent reasonably practicable) be likely to prejudice materially the offering or the distribution of the Convertible Bonds or dealings in the Convertible Bonds in the secondary market. Upon the termination notice being given by the Sole Manager pursuant to the Subscription Agreement, the Subscription Agreement shall terminate and be of no further effect, and the Company and the Sole Manager shall be under no liability to each other in respect of the Subscription Agreement (except for certain obligations of the Company as prescribed in the Subscription Agreement). 6

7 Comparison of the Conversion Price The initial Conversion Price (subject to adjustment), being HK$1.00 per Share represents: (a) (b) (c) approximately 10% premium over the closing price of the Shares as quoted on the Stock Exchange on the Last Trading Date; approximately 9% premium over the five-day average closing price of the Shares over the five consecutive Trading Days up to and including the Last Trading Date; approximately 9% premium over the ten-day average closing price of the Shares over the ten consecutive Trading Days up to and including the Last Trading Date. The net price of each Conversion Share to the Company, (i) not including the Option Bonds based on the estimated net proceeds of approximately HK$751.7 million and 775,020,000 Conversion Shares; and (ii) including the Option Bonds based on the estimated net proceeds of approximately HK$227.8 million and 232,506,000 Conversion Shares, (based on the initial conversion ratio of 1,550,040 Shares per Convertible Bond), is expected to be approximately HK$0.97. Assuming full conversion of the Convertible Bonds at the initial Conversion Price of HK$1.00 per Share, the Convertible Bonds (not including the Option Bonds) will be convertible into 775,020,000 Shares (subject to adjustment), representing approximately 14.94% of the issued share capital of the Company as at the date of this announcement and approximately 13.00% of the issued share capital of the Company as enlarged by the issue of such 775,020,000 Shares. The Conversion Shares will be allotted and issued by the Company pursuant to the general mandate granted to the Directors at the annual general meeting of the Company held on 22 May Assuming full conversion of the Convertible Bonds at the initial Conversion Price of HK$1.00 per Share, the Convertible Bonds (including the Option Bonds) will be convertible into 1,007,526,000 Shares (subject to adjustment), representing approximately 19.42% of the issued share capital of the Company as at the date of this announcement and approximately 16.26% of the issue share capital of the Company as enlarged by the issue of such 1,007,526,000 Shares. The Conversion Shares will be allotted and issued by the Company pursuant to the general mandate granted to the Directors at the annual general meeting of the Company held on 22 May Principal terms of the Convertible Bonds The principal terms of the Convertible Bonds are summarized as follows: Issuer: Principal amount: The Company US$100,000,000 (without taking into account the Option Bonds) 7

8 Form and denomination of the Convertible Bonds: The Convertible Bonds will be issued in registered form in the denomination of US$200,000 each and integral multiples of US$1,000 in excess thereof without coupons attached. Maturity Date: 24 November 2017 Issue Price: 100% of the principal amount of the Convertible Bonds Interest: The Convertible Bonds bear interest on their outstanding principal amount from and including 24 November 2015 at the rate of 6% per annum payable semi-annually in arrear on 24 May and 24 November in each year, commencing 24 May Conversion: Holders of the Convertible Bonds have the right to convert their Convertible Bonds into Shares at any time during the Conversion Period. Conversion Period: Holders of the Convertible Bonds may exercise their right to convert their Convertible Bonds into Shares at any time during the Conversion Period (on and after the 41st day after the Closing Date up to the close of business on the 10th day prior to the Maturity Date (subject to the terms of the Convertible Bonds) or if such Convertible Bond shall have been called for redemption under the terms of the Convertible Bond before the Maturity Date, then up to the close of business on a date no later than seven business days prior to the date fixed for redemption thereof or if notice requiring redemption has been given by the holder of such Convertible Bond under the terms of the Convertible Bond, then up to the close of business on the day prior to the giving of such notice or the foregoing periods may be extended pursuant to the terms and conditions of the Convertible Bonds). Conversion Price: The price at which Shares will be issued upon conversion will initially be HK$1.00 per Share but will be subject to adjustment in accordance with the terms and conditions of the Convertible Bonds. Adjustment to the Conversion Price: The Conversion Price will be adjusted upon the happening of any of the following events: (a) consolidation, subdivision or reclassification; (b) capitalisation of profits or reserves; (c) distributions; (d) rights issues of shares or options over shares; (e) rights issues of other securities; (f) issues at less than current market price; 8

9 (g) other issues at less than current market price; (h) modification of rights of conversion; (i) other offers to shareholders; or (j) other events. Conversion Price Reset: If the current market price of the Shares on 24 May 2016 (the Reset Date ), converted into U.S. dollars at the Prevailing Exchange Rate is less than the Conversion Price on the Reset Date, converted into U.S. dollars at the Fixed Exchange Rate, the Conversion Price shall be adjusted on the Reset Date in accordance with the following formula: New Conversion Price = Current Market Price Fixed Exchange Rate / Prevailing Exchange Rate Such adjusted Conversion Price shall be rounded upwards, if necessary, to the nearest HK$0.01. Provided that: (i) (ii) any such adjustment shall be limited so that the adjusted Conversion Price shall not be less than 70% of the initial Conversion Price (reflecting any adjustments required under the terms and conditions of the Convertible Bonds which may have occurred prior to the Reset Date); the provisions on adjustments to conversion price shall apply mutatis mutandis to the condition on the conversion price reset to ensure that appropriate adjustments shall be made to the current market price to reflect any adjustments made to the Conversion Price in accordance with the condition on adjustments to conversion price; and (iii) for the avoidance of doubt, any adjustment to the Conversion Price made pursuant to this condition shall only be a downward adjustment. Any such adjustment shall become effective on the Reset Date and shall be notified to the Bondholders on the Reset Date in accordance with the notice provision. 9

10 Cash Settlement Option: Ranking of New Shares: Ranking of the Convertible Bonds: Redemption at Maturity: Redemption at the Option of the Company: At any time when the Company is required to deliver Shares upon conversion of Convertible Bonds and it is unable to do so without contravening the applicable laws of Bermuda or the listing rules of the Stock Exchange or an Alternative Stock Exchange, the Company shall have the option to pay directly to the relevant Bondholder an amount of cash in U.S. dollars in order to satisfy its obligation to deliver Shares. The Conversion Shares will rank pari passu with the Shares in issue on the relevant Registration Date. The Convertible Bonds constitute direct, unsubordinated, unconditional and (subject to the terms and conditions of the Convertible Bonds) unsecured obligations of the Company and shall at all times rank pari passu and without any preference or priority among themselves. Unless previously redeemed, converted or purchased and cancelled as provided in the terms and conditions of the Convertible Bonds, the Company will redeem each Convertible Bond at its principal amount together with accrued and unpaid interest on the Maturity Date. The Company may not redeem the Convertible Bonds at its option prior to the Maturity Date except as stipulated in the terms and conditions of the Convertible Bonds. (a) At any time after 24 November 2016, the Company may, if it has given not less than 30 nor more than 60 days notice (an Optional Redemption Notice ) in accordance with the notice provision, redeem the Convertible Bonds in whole but not in part on the date specified in the Optional Redemption Notice at their principal amount as at the date fixed for redemption together with interest accrued and unpaid to, but excluding, such date, provided that no such redemption may be made unless the Closing Price of the Shares for 20 out of the 30 consecutive Trading Days immediately prior to the date upon which an Optional Redemption Notice is given pursuant to the terms and conditions of the Convertible Bonds, was at least 130% of the principal amount divided by the Conversion Ratio then in effect. 10

11 Redemption for Taxation Reasons: (b) At any time the aggregate principal amount of the Convertible Bonds outstanding is less than 10% of the aggregate principal amount originally issued, the Company shall have the option to redeem such outstanding Convertible Bonds in whole but not in part at their principal amount as at the date fixed for redemption together with interest accrued and unpaid to, but excluding, such date. The Company will give at least 30 days but not more than 60 days prior notice of such redemption to the Bondholders in accordance with the terms and conditions of the Convertible Bonds. The Company may, on giving not less than 30 days notice but not more than 60 days notice in accordance with the notice provisions of the Convertible Bonds (which notice shall be irrevocable) redeem the Convertible Bonds in whole, but not in part, at the principal amount as at the date fixed for redemption, together with interest accrued but unpaid to, but excluding, such date, if: (a) the Company satisfies the Trustee immediately prior to the giving of such notice that it has or will become obliged to pay additional tax amounts as referred to in the terms and conditions of the Convertible Bonds as a result of any change in, or amendment to, the laws or regulations of the Bermuda or any political subdivision or any authority having power to tax, or any change in the general application or official interpretation of such laws or regulations, which change or amendment becomes effective on or after 3 November 2015; and (b) such obligation cannot be avoided by the Company taking reasonable measures available to it, Redemption at the Option of the Bondholders: provided that no such notice of redemption shall be given earlier than 90 days before the earliest date on which the Company would be obliged to pay such additional tax amounts were a payment in respect of the Convertible Bonds then due. The Company will at the option of the holder of any Convertible Bond, redeem all or some of that holder s Convertible Bonds on 24 November 2016 (the Put Option Date ) at their principal amount together with interest accrued and unpaid to, but excluding, such date. 11

12 Redemption for Relevant Event: Following the occurrence of a Relevant Event (as defined below), the holder of each Convertible Bond will have the right at such holder s option to require the Company to redeem all but not some only of such holder s Convertible Bonds on the Relevant Event Put Date at their principal amount as at the date fixed for redemption together with interest accrued and unpaid to, but excluding, such date. To exercise such right, the holder of the relevant Convertible Bonds must provide notice in accordance with the terms and conditions of the Convertible Bonds, by not later than 30 days following a Relevant Event, or if later, 30 days following the date upon which notice is given to Bondholders by the Company in accordance with the notice provision of the Convertible Bonds. The Relevant Event Put Date shall be the fourteenth day after the expiry of such period of 30 days as referred to above. Redemption following exercise of a Put Option: Relevant Event occurs when Shares cease to be listed or admitted to trading or are suspended for trading for a period exceeding 30 consecutive Trading Days on the Stock Exchange or any Alternative Stock Exchange, other than any cessation or suspension of securities generally on the Stock Exchange or such Alternative Stock Exchange or there has been a change of control as stipulated in the terms and conditions of the Convertible Bonds. Upon the exercise of any put option in Redemption at the Option of the Bondholders or in Redemption for Relevant Event as referred to above, payment of the applicable redemption amount shall be conditional upon delivery of certain documents in accordance with the terms and conditions of the Convertible Bonds. If the paying agent holds on the Put Date (as defined below) money sufficient to pay the applicable redemption monies of Convertible Bonds for which notices have been validly delivered (and not withdrawn with the consent of the Company) in accordance with the provisions of the Convertible Bonds upon exercise of such right, then, on and after such Put Date, (i) such Convertible Bond will cease to be outstanding; (ii) such Convertible Bond will be deemed to have been paid; and (iii) all other rights of the Bondholder shall terminate (other than the right to receive the applicable redemption monies). Put Date shall mean the Put Option Date or the Relevant Event Put Date as applicable. 12

13 Purchase: Cancellation: Negative Pledge: Transferability: Listing: The Company or any of its Subsidiaries may at any time and from time to time purchase Convertible Bonds at any price in the open market or otherwise. All Convertible Bonds which are redeemed by the Company or any of its Subsidiaries will forthwith be, and Convertible Bonds purchased by or on behalf of the Company or any of its Subsidiaries may be cancelled. So long as any Convertible Bond remains outstanding, the Company will not, and will ensure that none of its Subsidiaries will, create, or have outstanding, any mortgage, charge, pledge, lien or other security interest upon the whole or any part of its present or future undertaking, assets or revenues (including any uncalled capital) to secure any Relevant Indebtedness of the Company, or to secure any guarantee or indemnity in respect of any such Relevant Indebtedness of the Company, without at the same time or before according to the Convertible Bonds (a) the same security as is created or is subsisting to secure any such Relevant Indebtedness, guarantee or indemnity or (b) such other security as shall be approved by an extraordinary resolution of the Bondholders. Subject to the terms and conditions of the Convertible Bonds, there are no restrictions on the transfer of the Convertible Bonds. It is intended that the Convertible Bonds will be listed on the Stock Exchange and the Company will use commercially reasonable endeavours to obtain the listing of the Convertible Bonds on the Stock Exchange. The Company will apply to the Stock Exchange for the listing of, and permission to deal in, the Shares. Reasons for the Issue of the Convertible Bonds The Directors consider that issue of the Convertible Bonds represents an opportunity to broaden the capital base of the Company and to gain immediate access to funding on attractive terms. The Directors also consider the terms of the Subscription Agreement to be fair and reasonable in the interests of the Group and the Shareholders as a whole and that the Subscription Agreement is entered into upon normal commercial terms following arm s length negotiations between the Company and the Sole Manager. 13

14 Use of Proceeds The estimated net proceeds of the issue of the Convertible Bonds, after deduction of estimated expenses payable in connection with issue of the Convertible Bonds, will amount to approximately US$97 million (not including the Option Bonds) up to US$126.4 million (including the Option Bonds). The Company intends to use these proceeds of the Convertible Bonds for refinancing the Group s debts and provision of working capital for its general corporate purposes. The Company may adjust the foregoing plans in response to changing market conditions, and thus reallocate the use of proceeds. General Mandate By a resolution of the Shareholders passed at the annual general meeting of the Company on 22 May 2015, the Company granted the General Mandate to the Directors to allot, issue and deal with additional Shares not exceeding 20% of the aggregate nominal amount of the share capital of the Company in issue at the date of the meeting. As at the date of this announcement, there has been no issue of Shares under the General Mandate. The Shares will be allotted and issued under the General Mandate and no Shareholders approval is required. An application will be made to the Stock Exchange for the listing of, and permission to deal in, the Shares. Capital Raising Activities of the Company During the Past 12 Months Date of Announcements Events Net Proceeds Intended Use of Proceeds Actual Use of Proceeds 4 November 2014 Issue of convertible preference shares Consideration in lieu of cash approximately HK$4,514 million As part of the consideration of an acquisition Use as intended 27 November 2014 Issue of rights shares Approximately HK$840.3 million To provide fresh working capital for further development of the land property and other existing projects and businesses of the Group 27 November 2014 Placing Approximately HK$1,418.5 million To provide fresh working capital for further development of the land property and other existing projects and businesses of the Group 7 May 2015 Issue of senior notes Approximately US$242.6 million For working capital of the Company s construction business and general corporate purposes 19 May 2015 Issue of senior notes Approximately US$49.5 million For working capital of the Company s construction business and general corporate purposes Use as intended Use as intended Use as intended Use as intended 30 June 2015 Issue of convertible preference shares Consideration in lieu of cash approximately HK$1,084 million As part of the consideration of an acquisition Use as intended 14

15 Save as disclosed above, the Company has not conducted any equity fund raising activities during the past twelve months immediately preceding the date of this announcement. Changes in the Shareholding Structure of the Company The table below summarises the shareholding structure of the Company (i) as at the date of this announcement; (ii) assuming conversion of the Convertible Bonds (not including the Option Bonds) at the initial Conversion Price; and (iii) assuming full conversion of the Convertible Bonds (including the Option Bonds) at the initial Conversion Price: Name of shareholders As at the date of this announcement Number of Shares % As at the date of this announcement and immediately after conversion of all convertible preference shares Number of Shares % Immediately after conversion of all convertible preference shares and the Convertible Bonds (not including the Option Bonds) at the initial Conversion Price Number of Shares % Immediately after full conversion of all convertible preference shares and the Convertible Bonds (including the Option Bonds) at the initial Conversion Price Number of Shares % Tewoo Investment Co., Limited (Note 1) 137,940, % 137,940, % 137,940, % 137,940, % Riant Investment Co., Limited (Note 1) 375,921, % 3,326,526, % 3,326,526, % 3,326,526, % Neo Summit Limited (Note 2) 475,816, % 475,816, % 475,816, % 475,816, % Summit View Holdings Limited (Note 3) 991,041, % 991,041, % 991,041, % 991,041, % Rich Century Development Limited (Note 4) 0.00% 2,704,166, % 2,704,166, % 2,704,166, % Chow Tai Fook Nominee Limited (Note 5) 400,000, % 400,000, % 400,000, % 400,000, % VMS Investment Group Ltd. (Note 6) 400,000, % 400,000, % 400,000, % 400,000, % ZHOU Wei (Note 7) 48,932, % 48,932, % 48,932, % 48,932, % Wilfred WONG Ying Wai (Note 8) 26,000, % 26,000, % 26,000, % 26,000, % Holders of the Convertible Bonds 0.00% 0.00% 775,020, % 1,007,526, % Public 2,332,924, % 2,332,924, % 2,332,924, % 2,332,924, % Total 5,188,576, % 10,843,348, % 11,618,368, % 11,850,874, % Notes: (1) Tewoo Group Co., Ltd. is interested in the entire issued share capital of Tewoo Investment Co., Limited and is therefore deemed to be interested in the Shares held by Tewoo Investment Co., Limited. Tewoo Investment Co., Limited is interested in the entire issued share capital of Riant Investment Co., Limited and is therefore deemed to be interested in the Shares held by Riant Investment Co., Limited. (2) Neo Summit Limited is owned by (i) Pinnacle State Real Estate Limited as to 28.89%; (ii) Summit View Holdings Limited as to 13.33%; (iii) Jones Capital Investments Limited as to 28.89%; and (iv) Becl World Holding Ltd as to 28.89%. Pinnacle State Real Estate Limited is indirectly wholly-owned by Dr. Wilfred WONG Ying Wai. Jones Capital Investments Limited is wholly-owned by Ms. MA Kwing, Pony. As such, Neo Summit Limited is deemed to be a controlled corporation of Dr. Wilfred WONG Ying Wai and Ms. MA Kwing, Pony under the SFO. Mr. LIN Zhuo Yan is the spouse of Ms. MA Kwing, Pony and is deemed to be interested under the SFO. 15

16 (3) Summit View Holdings Limited is owned as to 50% by Dr. Wilfred WONG Ying Wai and 50% by Ms. MA Kwing, Pony. As such, Summit View Holdings Limited is deemed to be a controlled corporation of Dr. Wilfred WONG Ying Wai and Ms. MA Kwing, Pony under the SFO. Mr. LIN Zhuo Yan is the spouse of Ms. MA Kwing, Pony and is deemed to be interested under the SFO. (4) Mr. LIN Zhuo Yan is interested in the entire issued share capital of Rich Century Development Limited and is therefore deemed to be interested in the Shares held by Rich Century Development Limited. Ms. MA Kwing, Pony is the spouse of Mr. LIN Zhuo Yan and is deemed to be interested under the SFO. (5) Mr. CHENG Yu Tung is interested in the entire issued share capital of Chow Tai Fook Nominee Limited and is therefore deemed to be interested in the Shares held by Chow Tai Fook Nominee Limited. (6) Ms. MAK Siu Hang Viola is interested in the entire issued share capital of VMS Holdings Limited and is therefore deemed to be interested in the Shares held by VMS Holdings Limited. VMS Holdings Limited is interested in the entire issued share capital of VMS Investment Group Ltd and is therefore deemed to be interested in the Shares held by VMS Investment Group Ltd. (7) Mr. ZHOU Wei is an Executive Director of the Company. (8) Dr. Wilfred WONG Ying Wai is a senior adviser to the Board. INFORMATION ABOUT THE COMPANY The Group is a leading integrated construction and property group in Hong Kong. The Company has dedicated itself to becoming the leader in the market and firmly upheld its principle of (i) creating value for its customers and delivering quality services at world-class standard and (ii) delivering value to its shareholders through maximising market share and returns. Traditionally, the Group has been mainly engaged in construction and management services business. Currently, the Group also focuses on developing new business lines and markets. Since 2011, the Group has strategically extended its business into the property investment and development in the PRC through successful acquisitions of property investment and development projects. The Group currently operates in Hong Kong, Macau and the PRC and engages in a wide range of business including building construction, civil engineering, electrical and mechanical installation, interiors and special projects, property development and investment, and provision of property and facility management services in those regions. Completion of the Subscription Agreement is subject to fulfilment, or waiver, of the conditions set out above. In addition, the Subscription Agreement may be terminated under certain circumstances. Please refer to the section headed The Subscription Agreement above for further information. As the Subscription Agreement may or may not be completed, Shareholders and prospective investors are reminded to exercise caution when dealing in the Shares. 16

17 DEFINITIONS In this announcement, the following expressions shall have the meanings set out below unless the context requires otherwise: Agency Agreement Alternative Stock Exchange Board Bondholder(s) Closing Date Company connected person Convertible Bond(s) Conversion Price Conversion Ratio Conversion Share(s) Director(s) a paying, conversion and transfer agency agreement to be dated the Closing Date between the Company, the Trustee and the paying agents at any time the Shares are not listed and traded on the Stock Exchange, the principal stock exchange or securities market on which the Shares are then listed or quoted or dealt in the board of directors of the Company the person in whose name a Convertible Bond is registered in the register mean on or about 24 November 2015 or such other date as shall be agreed between the Company and the Sole Manager Hsin Chong Construction Group Ltd., a company incorporated in Bermuda with limited liability, the Shares of which are listed on the main board of the Stock Exchange has the meaning ascribed to it under the Listing Rules 6% convertible bonds due 2017 in the aggregate principal amount of US$130 million to be issued by the Company, including an option to subscribe for additional convertible bonds in the principal amount of US$30 million to be issued by the Company the price per Share at which the Convertible Bonds may be converted into Shares the principal amount of each Convertible Bond divided by the Conversion Price then in effect immediately prior to the date upon which the Optional Redemption Notice is given shares which may fall to be issued by the Company on conversion of the Convertible Bonds the director(s) of the Company from time to time 17

18 Fixed Exchange Rate General Mandate Group Hong Kong HK$ Last Trading Date Listing Rules Macau Offering Circular Option Closing Date PRC Prevailing Exchange Rate Publication Date a fixed exchange rate of HK$ to US$1.00 the general mandate granted to the Directors at the annual general meeting of the Company held on 22 May 2015 to allot, issue and deal with additional Shares not exceeding twenty per cent (20%) of the aggregate nominal amount of the share capital of the Company in issue at the date of the meeting the Company and its subsidiaries from time to time the Hong Kong Special Administrative Region of the People s Republic of China Hong Kong dollar(s), the lawful currency of Hong Kong Special Administrative Region of the PRC 3 November 2015, being the last Trading Day for the Shares immediately prior to the publication of this announcement the Rules Governing the Listing of Securities on the Stock Exchange the Macau Special Administrative Region of the People s Republic of China an offering circular dated not later than one business day prior to Closing Date or such other date as may be agreed between the Company and the Sole Manager the date the Option Bonds are to be issued by the Company against payment for the Option Bonds the People s Republic of China, excluding Hong Kong, Macau and Taiwan for the purpose of this announcement means the latest available noon buying rate for the purchase of U.S. dollars with Hong Kong dollars as set forth in the H.10 weekly statistical release of the Federal Reserve Board on the Reset Date date of offering circular which is not later than one business day prior to Closing Date or such other date as may be agreed between the Company and the Sole Manager 18

19 Registration Date Relevant Indebtedness SFO Shareholder(s) Share Lender Shares Sole Manager Stock Borrow Agreement Stock Exchange Subscription Agreement the date on which the person or person(s) is registered as the holder(s) of the number of Shares on the Company s register of shareholders is to any indebtedness that is in the form of, or represented or evidenced by, bonds, notes, loan stock, certificates of deposit or other similar securities or instruments which for the time being are, or are capable of being, quoted, listed, dealt in or traded on any stock exchange or over-the-counter or other securities market and for the avoidance of doubt, shall not include indebtedness under any secured transferable loan facility Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) holders of the Shares Ms. CHOI Kim Lan ordinary share(s) of HK$0.1 each in the issued share capital of the Company China Merchants Securities (HK) Co., Limited a stock borrow agreement dated 3 November 2015 between the Share Lender and the Sole Manager as the share borrower The Stock Exchange of Hong Kong Limited the subscription agreement relating to the issue and subscription of the Convertible Bonds dated 3 November 2015 between the Company and the Sole Manager 19

20 Subsidiary(ies) Trading Day(s) Trust Deed Trustee United States US$ U.S. Securities Act any company or other business entity of which a person owns or controls (either directly or through one or more other Subsidiaries) more than 50% of the issued share capital or other ownership interest having ordinary voting power to elect directors, managers or trustees of such company or other business entity or any company or other business entity which at any time has its accounts consolidated with those of that person or which, under the law, regulations or generally accepted accounting principles of Hong Kong from time to time, should have its accounts consolidated with those of that person a day when the Stock Exchange or, as the case may be, an Alternative Stock Exchange is open for dealing business, provided that if no Closing Price is reported in respect of the relevant Shares on the Stock Exchange or, as the case may be, the Alternative Stock Exchange for one or more consecutive dealing days such day or days will be disregarded in any relevant calculation and shall be deemed not to have existed when ascertaining any period of dealing days a trust deed dated the Closing Date between the Company and the Trustee Citicorp International Limited the United States of America United States dollar(s) the United States Securities Act of 1933, as amended % per cent. By Order of the Board of Hsin Chong Construction Group Ltd. Joseph CHOI Kin Hung Executive Director and Chief Executive Officer Hong Kong, 4 November 2015 As at the date of this announcement, the Board comprises Mr. Joseph CHOI Kin Hung (Chief Executive Officer), Mr. ZHOU Wei, Mr. Wilfred WU Shek Chun and Mr. LUI Chun Pong as Executive Directors; Mr. LIN Zhuo Yan (Non-executive Chairman), Mr. YAN Jie, Mr. CHEN Lei and Mr. CHUI Kwong Kau as Non-executive Directors; and Mr. CHENG Sui Sang, Mr. GAO Jingyuan and Ms. LEE Jai Ying as Independent Non-executive Directors. * for identification purposes only 20