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. Legend Holdings Corporation (A joint stock limited company incorporated in the People s Republic of China with limited liability) (Stock Code: 3396) Connected Transaction Provision of Guarantee On February 5, 2016, Right Lane, a wholly-owned subsidiary of the Company and as the guarantor, entered into a facility agreement relating to a term loan facility with a maximum amount of US$100,000,000 with Well Faith, an associate of the Company and as the borrower, and the Banks, as the lenders, to provide a continuing corporate guarantee to secure the whole amount of such term loan in favour of the Banks. As a return, Well Faith will pay a Guarantee Fee to Right Lane. Mr. ZHAO, an executive Director and executive vice president of the Company, is a connected person of the Company under Chapter 14A of the Listing Rules. Mr. ZHAO indirectly holds more than 30% interest in Well Faith and HCML. As such, Well Faith is deemed as an associate of Mr. ZHAO under the Listing Rules. Under Rule 14A.24(4) of the Listing Rules, the provision of the Guarantee (including the receipt of the Guarantee Fee) constitutes a connected transaction of the Company. The provision of the Guarantee (including the receipt of the Guarantee Fee) and the transaction contemplated under the Facility Agreement have been approved by the Board. The Directors (excluding Mr. ZHAO), including independent non-executive Directors, have confirmed that although it is not in the ordinary and usual course of business of the Group, the terms and conditions of the Guarantee (including the receipt of the Guarantee Fee) are fair and reasonable, on normal commercial terms and in the interests of the Company and the Shareholders as a whole. In addition, all the relevant applicable percentage ratios in respect of the Guarantee (including the receipt of the Guarantee Fee) are less than 5%. The Guarantee (including the receipt of the Guarantee Fee) does not constitute a discloseable transaction of the Company under the Listing Rules. Accordingly, the Guarantee (including the receipt of the Guarantee Fee) is subject to reporting and announcement requirements but exempt from the shareholders approval requirements under Chapter 14A of the Listing Rules. 1
INTRODUCTION On February 5, 2016, Right Lane, a wholly-owned subsidiary of the Company and as the guarantor, entered into a facility agreement relating to a term loan facility with a maximum amount of US$100,000,000 with Well Faith, an associate of the Company and as the borrower, and the Banks, as the lenders, to provide a continuing corporate guarantee to secure the whole amount of such term loan in favour of the Banks. The principal terms of the Facility Agreement are as follows: Date: February 5, 2016 Parties: (1) Right Lane, as the guarantor (2) the Banks, as the lenders (3) Well Faith, as the borrower Guarantee liability: Under the Facility Agreement, Right Lane provides the Guarantee in respect of all amounts due under the Facility Agreement and associated finance documents, for a term commencing on the date of the Facility Agreement and ending on the date of full settlement of the loan. Duration of the term loan: 48 months after date of the Facility Agreement Conditions precedents: Under the Facility Agreement, the condition precedents include, but not limited to: 1. All documents and evidences listed in the schedule to the Facility Agreement has been received by, in the form and substance satisfactory to, the Banks; 2. No default is continuing and would result from the term loan; and 3. Each of the representations as set out in the Facility Agreement to be made by Well Faith and Right Lane are true in all material respects. 2
Well Faith will use the term loan for the development of the Shenzhen Qianhai Shenzhen-Hong Kong Land Development Project. As requested by the Banks, the whole amount of the term loan shall be secured under the Guarantee provided by Right Lane in connection with the Facility Agreement. As a return, Well Faith will pay a Guarantee Fee to Right Lane. It is expected that the Guarantee Fee to be received by Right Lane will be approximately RMB6,551,600 per annum. REASONS FOR AND BENEFITS OF THE PROVISION OF THE GUARANTEE Upon completion, the Shenzhen Qianhai Shenzhen-Hong Kong Land Development Project will become an operation head office of the controlling shareholder of Well Faith and an important operation centre of financial business of the Company. Subject to compliance of the relevant laws and regulations and government approval, the Company may acquire certain interests in the Shenzhen Qianhai Shenzhen-Hong Kong Land Development Project. In the event that such acquisition has triggered any disclosure obligation under the Listing Rules, the Company will issue a further announcement to notify its shareholders. The provision of the Guarantee will help to meet the funding needs of the development of the Shenzhen Qianhai Shenzhen-Hong Kong Land Development Project which is beneficial for the expansion of the project, and to bring revenue to Right Lane as the result of the receipt of Guarantee Fee. As such, the Directors (excluding Mr. ZHAO), including independent nonexecutive Directors, are of the opinion that although it is not in the ordinary and usual course of business of the Group, the terms and conditions of the Guarantee (including the receipt of the Guarantee Fee) are fair and reasonable, on normal commercial terms, and in the interests of the Company and the Shareholders as a whole. LISTING RULES IMPLICATIONS Mr. ZHAO, an executive Director and executive vice president of the Company, is a connected person of the Company under Chapter 14A of the Listing Rules. Mr. ZHAO indirectly holds more than 30% interest in Well Faith and HCML. As such, Well Faith is deemed as an associate of Mr. ZHAO under the Listing Rules. Under Rule 14A.24(4) of the Listing Rules, the provision of the Guarantee (including the receipt of the Guarantee Fee) constitutes a connected transaction of the Company. 3
As Mr. ZHAO is a director of the Company, he has abstained from voting on the resolution of the Board in respect of the Guarantee (including the receipt of the Guarantee Fee). Save as disclosed above, no Directors have material interest in the Guarantee (including the receipt of the Guarantee Fee), nor required to abstain from voting on the relevant resolution of the Board. To the best of the Directors knowledge, information and belief after having made all reasonable enquiries, the Banks and their ultimate beneficial owners are third parties independent of the Company and its connected persons. In addition, all the relevant applicable percentage ratios in respect of the Guarantee (including the receipt of the Guarantee Fee) are less than 5%. The Guarantee (including the receipt of the Guarantee Fee) does not constitute a discloseable transaction of the Company under the Listing Rules. Accordingly, the Guarantee (including the receipt of the Guarantee Fee) is subject to reporting and announcement requirements but exempt from the shareholders approval requirements under Chapter 14A of the Listing Rules. INFORMATION OF THE GROUP The Group is a leading Chinese investment group and has established a significant presence across diverse industries and accumulated a wealth of portfolio companies. Legend Holdings strategically invests in six major sectors: IT, financial services, consumer services including healthcare services, agriculture and food, property, and chemicals and energy materials. It also houses significant financial investment vehicles ranging from early stage to venture capital to private equity investments. Relying on its distinctive insight and experiences in incubating successful businesses, Legend Holdings provides management enhancement, brand endorsement, financial support and other value-added services to its portfolio companies. It is committed to cultivating industryleading companies and constantly enhancing the company s long-term value through dynamic portfolio management and by creating synergy between its strategic and financial investments. INFORMATION OF RIGHT LANE Right Lane is a company incorporated in Hong Kong with limited liability and a wholly-owned subsidiary of the Company. It is principally engaged in investment holding and provision of investment management services. 4
INFORMATION OF HCML HCML is a company incorporated in the Cayman Islands with limited liability and held by Right Lane as to 20%. It is principally engaged in provision of management services for funds. A limited partnership under the management of HCML indirectly holds all equity interest in Well Faith, and HCML indirectly holds all equity interest in the investor of Shenzhen Qianhai Shenzhen-Hong Kong Land Development Project. INFORMATION OF WELL FAITH Well Faith is a company incorporated in the British Virgin Islands with limited liability and an associate of Right Lane, indirectly held by Right Lane as to 20%. It is principally engaged in investment management business. DEFINITIONS In this announcement, unless the context requires otherwise, the following terms shall have the following meanings: associate shall have the same meanings ascribed thereto under the Listing Rules Banks the lenders under the Facility Agreement from time to time, being at the date of this announcement and licensed banks in Hong Kong in which Wing Lung Bank, Limited acts as a lead manager for the syndicate of the Banks Board the board of directors of the Company Company or Legend Holdings Legend Holdings Corporation, a joint-stock company incorporated with limited liability under the laws of the PRC, the H shares of which are listed on the main board of the Stock Exchange connected person(s) shall have the same meanings ascribed thereto under the Listing Rules connected transaction shall have the same meanings ascribed thereto under the Listing Rules 5
Director(s) director(s) of the Company Facility Agreement the facility agreement dated February 5, 2016 and entered into between, amongst others, Well Faith (an associate of the Company) as borrower, the Banks as lenders and Right Lane (a wholly-owned subsidiary of the Company) as guarantor, in relation to US$100,000,000 term loan facilities Group the Company and its subsidiaries Guarantee a continuing corporate guarantee provided by Right Lane in connection with the Facility Agreement Guarantee Fee 1% per annum on the maximum amount of the term loan (starting from the date of the Facility Agreement until the date when the obligations of the guarantor has been released) pursuant to a written agreement between Well Faith and Right Lane for a term of three years which is renewable for a further period upon agreement by both parties HCML Hony Capital Management Limited, a company incorporated in Cayman Islands with limited liability, held by Right Lane as to 20% HK$ Hong Kong dollars, the lawful currency of Hong Kong Hong Kong the Hong Kong Special Administrative Region of the PRC Listing Rules the Rules Governing the Listing of Securities on the Stock Exchange Mr. ZHAO Mr. ZHAO John Huan, an executive Director and executive vice president of the Company percentage ratios percentage ratios within the meaning of Rule 14.07 of the Listing Rules PRC the People s Republic of China, and for the purpose of this announcement excluding Hong Kong, Macau and Taiwan 6
Right Lane Right Lane Limited, a company incorporated in Hong Kong with limited liability and a wholly-owned subsidiary of the Company RMB Renminbi, the lawful currency of the PRC Shareholders holders of the shares of the Company Shenzhen Qianhai Shenzhen-Hong Kong Land Development Project located at Lots 1 and 2, No. 05, Unit 2, Guiwan Area, Shenzhen Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone, PRC ( 05 01 02 ) (land parcel no. T201-0082) with a total gross floor area of 100,000 square metres Stock Exchange The Stock Exchange of Hong Kong Limited US$ United States dollars, the lawful currency of the United States of America Well Faith Well Faith Management Limited, a company incorporated in British Virgin Islands with limited liability and an associate of the Company % per cent. By order of the Board Legend Holdings Corporation ZHU Linan Executive Director and President Hong Kong, February 10, 2016 As at the date of this announcement, the Executive Directors are Mr. LIU Chuanzhi, Mr. ZHU Linan and Mr. ZHAO John Huan; the Non-executive Directors are Mr. WU Lebin, Mr. WANG Jin and Mr. LU Zhiqiang; and the Independent Non-executive Directors are Mr. MA Weihua, Mr. ZHANG Xuebing and Ms. HAO Quan. 7