Parkson Retail : Very Substantial Disposal

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.

百盛商業集團有限公司

(Incorporated in the Cayman Islands with limited liability)

The Parties have entered into the EFA pursuant to which the Vendor has agreed to sell, and the Purchasers have agreed to purchase, the Sale Equity at the Total Equity Consideration upon the terms and conditions of the EFA. The Total Equity Consideration comprises (i) a fixed amount of RMB1,670,258,898.36; (ii) the aggregate amount of the cash and the bank balance as shown in the accounts of the Disposal Company as at the Handover Completion Date; and (iii) an amount equivalent to the Advanced Rental Taxes (or any part thereof) refunded by the PRC governmental authorities to the Disposal Company pursuant to the Tax Refund Application after the Issuance Date, if any. Completion of the EFA is subject to the fulfilment (or waiver, if applicable) of the Equity Conditions on or before the Long Stop Date.

The Vendor, the Company, Purchaser A and the Purchasers Parent have entered into the LFA with the Disposal Company concurrently with the signing of the EFA. Pursuant to the LFA, Purchaser A has agreed to acquire the Sale Loan from the Vendor at the Loan Consideration upon the terms and conditions of the LFA. Completion of the LFA is subject to the fulfilment (or waiver, if applicable) of the Loan Conditions on or before the Long Stop Date.

The Disposal constitutes a very substantial disposal for the Company and is therefore subject to the reporting, announcement and shareholders' approval requirements under Chapter 14 of the Listing Rules.

The EGM will be convened as soon as practicable for the Shareholders to consider and, if thought fit, approve the Transactions. The Circular, which will contain, among other things, further details on the Disposal will be despatched to the Shareholders on or before 15 November 2016.

1. INTRODUCTION

   The Board is pleased to announce that on 13 September 2016, the Company and the Vendor, an indirect wholly-owned subsidiary of the Company, entered into (i) the EFA with the Purchasers and the Purchasers Parent and (ii) the LFA with Purchaser A, the Purchasers Parent and the Disposal Company. Pursuant to the EFA, which is legally binding, the Vendor agreed to sell, and the Purchasers agreed to purchase, the Sale Equity at the Total Equity Consideration. The Vendor, the Company, Purchaser A and the Purchasers Parent entered into the LFA with the Disposal Company concurrently with the signing of the EFA. Pursuant to the LFA, which is legally binding, Purchaser A agreed to acquire the Sale Loan from the Vendor at the Loan Consideration.

2. THE EFA

   The principal terms of the EFA are summarised below:
3. Date

   13 September 2016.

4. Parties

   The Vendor, the Company, the Purchasers and the Purchasers Parent.

   To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, each of Purchaser A, Purchaser B and the Purchasers Parent and its ultimate beneficial owners are third parties independent of, and not connected with, the Company and its connected persons (as defined under the Listing Rules).

5. Assets to be disposed of

   The Sale Equity, of which Purchaser A shall acquire 99.99999999% and Purchaser B shall acquire 0.00000001%.

6. Total Equity Consideration and basis of its determination

7. The Total Equity Consideration

   The Total Equity Consideration, which is payable in cash, comprises:

8. Equity Consideration A in the amount of RMB1,670,258,898.36;

9. Equity Consideration B; and

10. Equity Consideration C.

    The Total Equity Consideration was determined after arm's length negotiations between the Vendor and the Purchasers with reference to (I) the unaudited net asset value of the Disposal Company as at 31 July 2016; (II) the prevailing market price of the properties comparable with the Disposal Property in size, age, usage and location; (III) the cash and bank balance that the Disposal Company may have as at the Handover Completion Date; and (IV) the Refunded Taxes that the Disposal Company may receive after the Issuance Date.

    As at 31 August 2016, the cash and bank balance of the Disposal Company was approximately RMB769,850.46.

11. Further information on the Refunded Taxes

    The Disposal Property, which is owned by the Disposal Company solely, was previously subject to the Previous Tenancy Agreements. The Advanced Rental Taxes had been paid by the Disposal Company to the relevant PRC governmental authorities as a result of the payment of the Advanced Rental. Since the Previous Tenancy Agreements had been terminated on 31 July 2016, the Disposal Company will apply to the relevant PRC governmental authorities for the refund of the business taxes and other relevant taxes and surcharges in relation to the Advanced Rental paid for the remaining tenancy period under the Previous Tenancy Agreements i.e. the period from 1 August 2016 to 31 August 2023.

    Assuming that the Tax Refund Application will be approved by the relevant PRC governmental authorities, it is expected that the maximum amount of the Refunded Taxes would be equivalent to the amount of the Advanced Rental Taxes (i.e. approximately RMB19,500,000).

    There is no guarantee that the Tax Refund Application will be approved by the relevant PRC governmental authorities and even if the Tax Refund Application is approved by the relevant PRC governmental authorities, there is no guarantee that the amount of the Refunded Taxes actually received by the Disposal Company will be equivalent to the expected maximum amount of the Refunded Taxes disclosed above.

12. Equity Deposit

    The Purchasers shall pay a deposit (the "Equity Deposit") in the amount of RMB167,000,000, representing approximately 10% of Equity Consideration A, into the Equity Escrow Account within five working days after the signing of the EFA. The Equity Deposit shall form part of the first instalment of Equity Consideration A.

13. Payment schedule of the Total Equity Consideration

14. Payments to the Equity Escrow Account

Equity Consideration A shall be paid by the Purchasers into the Equity Escrow Account in three instalments, the details of which are summarised below:

Instalments Portions of Equity Consideration A Timeline

First instalment ("First Equity Consideration Instalment")

20% Within five working days after the signing of the Equity Transfer Agreement(s)

Second instalment ("Second Equity Consideration Instalment")

40% (Subject to the fulfilment or waiver of the Equity Conditions) Within five working days after the electronic platform of the relevant branch of the Administration

for Industry and Commerce has

confirmed acceptance of the documents regarding the changes in, among

other things, the shareholders and the legal representative of the Disposal

Company, but before the submission of the documents regarding the above changes at the office of the relevant branch of the Administration for

Industry and Commerce

Third instalment

("Third Equity Consideration Instalment")

40% Within five working days after the relevant branch of the Administration for

Industry and Commerce has issued a

notice on acceptance of the documents regarding, among other things, changes in the shareholders and the legal

representative of the Disposal Company