Ground International Development : Discloseable Transaction - Disposal of the Entire Equity Interests in A Subsidiary

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

(Incorporated in Bermuda with limited liability)

(Stock Code: 989)

Reference is made to the announcements of the Company dated 5 May 2017 and 7 June 2017 respectively, in relation to, among other things, the Board's intention to discontinue the Telecommunication Business in the PRC and authorising the management of the Group to commence searches for and negotiations with potential purchasers for the disposal of the said business.

On 30 June 2017 (after trading hours of the Stock Exchange), Shanghai Jinhan, an indirect wholly owned subsidiary of the Company, entered into the Disposal Agreement with the Purchaser, pursuant to which Shanghai Jinhan has conditionally agreed to sell, and the Purchaser has conditionally agreed to purchase, the entire equity interests on the Target Company for the Disposal Consideration of RMB43,000,000.

As at the date of this announcement, the Target Company is an indirect wholly-owned subsidiary of the Company. The Target Company is the holding company of the Disposal Group which is principally engaged in the Telecommunication Business in the PRC. Upon Completion, the Group will cease to have any equity interest in the Disposal Group; and the Disposal Group will cease to be subsidiaries of the Company; and the Telecommunication Business of the Group will discontinue.

As one or more of the applicable percentage ratios (as defined under the Listing Rules) in respect of the Disposal as contemplated under the Disposal Agreement are more than 5% but are less than 25%, the Disposal constitutes a discloseable transaction on the part of the Company under Chapter 14 of the Listing Rules and is subject to the reporting and announcement requirements as set out in Chapter 14 of the Listing Rules.

Reference is made to the announcements of the Company dated 5 May 2017 and 7 June 2017 respectively (the "Announcements"), in relation to, among other things, the Board's intention to discontinue the Telecommunication Business in the PRC and authorising the management of the Group to commence searches for and negotiations with potential purchasers for the disposal of the said business.

On 30 June 2017 (after trading hours of the Stock Exchange), Shanghai Jinhan, an indirect wholly owned subsidiary of the Company, entered into the Disposal Agreement with the Purchaser, pursuant to which Shanghai Jinhan has conditionally agreed to sell, and the Purchaser has conditionally agreed to purchase, the entire equity interests in the Target Company for the Disposal Consideration of RMB43,000,000.

Principal terms of the Disposal Agreement are set forth below:

Date: 30 June 2017

The Purchaser is a company established under the laws of the PRC with limited liability. To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, each of the Purchaser and its ultimate beneficial owner(s) and their respective associates is an independent third party of the Company and its connected persons (as defined in the Listing Rules).

Pursuant to the Disposal Agreement, Shanghai Jinhan has conditionally agreed to sell, and the Purchaser has conditionally agreed to purchase, the entire equity interests in the Target Company.

As at the date of this announcement, the Target Company is an indirect wholly-owned subsidiary of the Company. The Target Company is the holding company of the Disposal Group which is principally engaged in the Telecommunication Business in the PRC. Further details of the Disposal Group are set out in the section headed "Information of the Disposal Group" in this announcement.

The Disposal Consideration is RMB43,000,000 and shall be paid by the Purchaser in cash in the following manner:

1. 10% of the Disposal Consideration (the "Deposit") shall be paid within 15 days of the date of the Disposal Agreement; and

2. the remaining balance of the Disposal Consideration shall be paid within 30 days of the Completion Date (as defined in the section headed "Completion" in this announcement).

The parties to the Disposal Agreement agreed to use their best endeavours to procure the completion of the industrial and commercial registration of the transfer of the equity interests in the Target Company (the "I&C Registration") within 7 business days following the payment of the Deposit by the Purchaser.

As a security for the remaining balance of Disposal Consideration, the Purchaser agreed to execute a share charge (the "Share Charge") in respect of entire equity interests in the Target Company in favour of the Purchaser and/or its nominee within 2 days upon the completion of the I&C Registration. The Share Charge shall be discharged within 3 days upon Shanghai Jinhan receiving the remaining balance of Disposal Consideration and the settlement of all current debts between the Disposal Group and Shanghai Jinhan and its related companies.

The Disposal Consideration and the arrangement of the Share Charge, was arrived at after arm's length negotiations between the parties to the Disposal Agreement after taking into consideration of various factors, including (i) the reasons for the Disposal as mentioned in the section headed "Reasons for and benefits of the Disposal and use of proceeds" in this announcement; and (ii) appraised net asset value of the Target Company of RMB42,963,900 as at 31 May 2017 according to the Valuation Report.

The parties to the Disposal Agreement agreed that (i) all revenue or expenses resulting from any change of business of the Disposal Group from the date of the Disposal Agreement until Completion shall be enjoyed and borne by the Purchaser and (ii) the dividends declared on 1 June 2017 and payable by the Target Company to Shanghai Jinhan shall be payable within 3 months from the Completion Date.

The Directors consider the terms and conditions of the Disposal Agreement are fair and reasonable and on normal commercial terms and are in the interests of the Company and the Shareholders as a whole.

The Disposal is conditional upon the following Conditions Precedent being satisfied or waived by both parties to the Disposal Agreement:

1. the information disclosed by Shanghai Jinhan and the Disposal Group being true, accurate, not misleading or omission in all material respects during the due diligence conducted by the Purchaser;

2. save as material events that have already been disclosed to the Purchaser by Shanghai Jinhan, there being no material change to the principal business of the Disposal Group;

3. save as material events that have already been disclosed to the Purchaser by Shanghai Jinhan, there being no material adverse change to the assets structure and condition of the Disposal Group; no incidents which may materially and adversely affect the financial condition, prospect, assets or obligations of the businesses operated by the Disposal Group; no situation leading to any cessation of business of the Disposal Group; and no charge, pledge, seizing, freezing or other encumbrances or third party rights over the equity interests of the Disposal Group;

4. the parties to the Disposal Agreement having performed and fulfilled the representations and warranties contained in the Disposal Agreement;

5. the passing of board resolutions and shareholders' resolutions by the Target Company approving the Disposal; and

6. all necessary approvals and consents required to be obtained on the part of the Company under all applicable laws and regulations (including the Listing Rules) having been obtained.

All Conditions Precedent above shall be fulfilled within 60 business days after the date of the Disposal Agreement unless both parties to the Disposal Agreement unanimously agreed to extend the time limit.

"Completion Date" is the day when all the approval and registration procedures below are completed:

1. Shanghai Jinhan having transferred all information and properties of the Disposal Group to the Purchaser, including but not limited to various seals, articles of association, financial books and records, tax returns, audit reports, tax assessment reports and contracts;

2. the industrial and commercial registration of the transfer of the equity interests in the Target Company having been completed;

3. the supervisory department of industrial and commercial affairs having issued the receipt of change of registration to the Target Company; and

4. the filing and registration of the Disposal having been completed on the records of the Target Company on the industrial and commercial administrative department and the Purchaser having been legally registered as the shareholder of the Target Company as shown on the industrial and commercial registry.

Upon Completion, the Group will cease to have any equity interest in the the Disposal Group; the Disposal Group will cease to be subsidiaries of the Company; and the Telecommunication Business of the Group will discontinue.

As at the date of this announcement, the Group is principally engaged in property development and management, property investment, provision of telecommunications retail sales and management services and provision of guarantee services in the PRC, and the Purchaser is principally engaged in advertising design, agency and distribution in the PRC.