Hkc : Announcements and Notices - Discloseable Transaction - Disposal of the Entire Issued Share Capital of HKc Guilin Expressway Limited and the Shareholder's Loan

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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.

(Incorporated in Bermuda with limited liability)

(Stock code: 190)

(website: www.hkcholdings.com)

DISCLOSEABLE TRANSACTION DISPOSAL OF THE ENTIRE ISSUED SHARE CAPITAL OF HKC GUILIN EXPRESSWAY LIMITED AND THE SHAREHOLDER'S LOAN THE SALE AND PURCHASE AGREEMENT

On 26 May 2016 (after trading hours of the Stock Exchange), the Vendor, the Purchaser and the Company entered into the Sale and Purchase Agreement. Pursuant to the Sale and Purchase Agreement, the Vendor conditionally agreed to sell, and the Purchaser conditionally agreed to purchase, (i) the Sale Share, representing the entire issued share capital of the Target Company, and (ii) the Shareholder's Loan. As all of the Conditions Precedent under the Sale and Purchase Agreement had been fulfilled or waived (as the case may be) as at the date of this announcement, the Completion took place simultaneously with the signing of the Sale and Purchase Agreement on 26 May 2016 (after trading hours of the Stock Exchange).

* For identification purposes only

The final Consideration for the Sale Share and the Shareholder's Loan paid by the Purchaser amounted to RMB332,110,000 (equivalent to approximately HK$395,211,000), representing the sum of the initial Consideration of RMB301,610,000 (equivalent to approximately HK$358,916,000) and the adjustment of RMB30,500,000 (equivalent to approximately HK$36,295,000), being the additional amount of the Shareholder's Loan extended by the Vendor to the Target Company during the period from

1 January 2016 to the date of Completion. The final Consideration was paid by the Purchaser to the Company, being the Vendor's nominee, in cash at Completion.

Prior to Completion, the Target Company was an indirect wholly-owned subsidiary of the Company. The Target Company was an investment holding company, which was incorporated for the sole purpose of holding the entire equity interest in the Project Company. The Project Company was principally engaged in the construction and operation of a toll road in Guilin, the PRC on a Build-Operate-Transfer contract.

Upon Completion, the Group ceased to hold any equity interest in the Target Company and the Project Company, and the Target Company and the Project Company ceased to be subsidiaries of the Group.

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios (as defined under the Listing Rules) in respect of the Disposal as contemplated under the Sale and Purchase Agreement are more than 5% but 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.

INTRODUCTION

On 26 May 2016 (after trading hours of the Stock Exchange), the Vendor, the Purchaser and the Company entered into the Sale and Purchase Agreement. Pursuant to the Sale and Purchase Agreement, the Vendor conditionally agreed to sell, and the Purchaser conditionally agreed to purchase, (i) the Sale Share, representing the entire issued share capital of the Target Company, and (ii) the Shareholder's Loan.

Principal terms of the Sale and Purchase Agreement are set forth below:

THE SALE AND PURCHASE AGREEMENT Date: 26 May 2016 Parties:

(1)	Vendor:	Faithful Investments Limited, an indirect wholly-owned subsidiary of the Company;
(2)	Purchaser :	Cornerstone Holdings Limited (佳選控股有限公司); and
(3)	Vendor's Guarantor :	the Company

To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, the Purchaser and its ultimate beneficial owner are Independent Third Parties. The Purchaser is an investment holding company and is the parent company of China Merchants Holdings (Pacific) Limited (招商局亞太有限公司), which is a leading toll road company

focused on investing in and managing toll roads in the PRC.

Assets to be disposed of

Pursuant to the Sale and Purchase Agreement, the Vendor conditionally agreed to sell, and the Purchaser conditionally agreed to purchase, (i) the Sale Share, representing the entire issued share capital of the Target Company, and (ii) the Shareholder's Loan.

Prior to Completion, the Target Company was an investment holding company, which was incorporated for the sole purpose of holding the entire equity interest in the Project Company. The Project Company was principally engaged in the construction and operation of a toll road in Guilin, the PRC on a Build-Operate-Transfer contract. Further details of the Disposal Group are set out in the section headed "Information of the Disposal Group" in this announcement.

Consideration

The initial Consideration for the Sale Share and the Shareholder's Loan was RMB301,610,000 (equivalent to approximately HK$358,916,000). Pursuant to the Sale and Purchase Agreement, the initial Consideration could be adjusted for the additional amount of the Shareholder's Loan extended by the Vendor to the Target Company during the period from 1 January 2016 to the date of Completion, provided that the total additional amount of the Shareholder's Loan would not exceed RMB30,500,000 (equivalent to approximately

HK$36,295,000). As at the date of Completion, the additional amount of the Shareholder's Loan during the period from 1 January 2016 to the date of Completion amounted to RMB30,500,000 (equivalent to approximately HK$36,295,000). Accordingly, the final Consideration paid by the Purchaser was RMB332,110,000 (equivalent to approximately HK$395,211,000), representing the sum of the initial Consideration of RMB301,610,000 (equivalent to approximately HK$358,916,000) and the adjustment of RMB30,500,000 (equivalent to approximately HK$36,295,000).

The final Consideration was paid by the Purchaser to the Company, being the Vendor's nominee, in cash at Completion.

The Consideration for the Disposal was arrived at after arm's length negotiations between the parties to the Sale and Purchase Agreement after taking into consideration various factors, including (i) the reasons for the Disposal as mentioned in the section headed "Reasons for the Disposal and use of proceeds" in this announcement; and (ii) the current financial position of the Disposal Group.

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

Conditions precedent

The Disposal was conditional upon the following Conditions Precedent being fulfilled:

1. all necessary authorisations, consents and approvals required to be obtained on the part of the Vendor in respect of the Sale and Purchase Agreement and the transaction contemplated thereunder having been obtained and such authorisations, consents and approvals remaining in full force and effect as at Completion and there being no other laws or governmental or regulatory requirements or orders or decrees or notices which prohibit, restrict or materially delay the Completion or result in any material adverse effect on the Target Company and the Project Company after Completion;

2. completion of the due diligence on the assets, liabilities, operations, engineering, tax, accounting and legal aspects of the Target Company and the Project Company by the Purchaser and the results of which being satisfactory to the Purchaser;

3. all authorisations, consents and approvals in respect of the Disposal having been obtained by the Target Company and the Project Company;