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 Vendor, the Company, the Purchasers and the Purchasers Parent have entered into the Equity Transfer Agreement on 13 October 2016 and, as a result, the EFA was terminated.

The Equity Transfer Agreement contains all the material terms of the EFA with necessary modifications to reflect the fact that the Equity Transfer Agreement has been entered into and the EFA has been terminated as a result thereof, save that (i) terms governing the vacation and handover of the Disposal Property have been added; (ii) certain terms governing the consequences of the No Breach by Vendor Condition and the No Breach by Purchasers Condition being unfulfilled (or waived) have been varied; (iii) terms regarding the affairs of the Disposal Company and the Disposal Property before the date on which the Vendor and the Purchasers signed the confirmation in relation to the handover of the Disposal Company and the Disposal Property have been added; and (iv) additional warranties have been given by the Vendor.

The Vendor, the Company, Purchaser A, the Purchasers Parent and the Disposal Company have entered into the Loan Transfer Agreement on 13 October 2016 and, as a result, the LFA was terminated.

The Loan Transfer Agreement contains all the material terms of the LFA with necessary modifications to reflect the fact that the Loan Transfer Agreement has been entered into and the LFA has been terminated as a result thereof, save that terms regarding the proof of the amount of the Disposal Company's debts have been added.

As disclosed in the First Announcement, since one of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) in respect of the Disposal exceeds 75%, 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.

1. BACKGROUND

   In the First Announcement, it was announced, among other things, that:

2. the EFA and the LFA had been entered into; and

3. the Equity Transfer Agreement(s) and the Loan Transfer Agreement(s) would be entered into within 30 calendar days after the signing of the EFA and the LFA (or such longer period as the Parties might agree).

4. SIGNING OF THE EQUITY TRANSFER AGREEMENT
1. Signing of the Equity Transfer Agreement

   The Board is pleased to announce that the Vendor, the Company, the Purchasers and the Purchasers Parent have entered into the Equity Transfer Agreement on 13 October 2016 as contemplated by the EFA and, as a result, the EFA was terminated.

   Save and except for the variations and supplements as summarised in paragraph (b) below (the "Equity Variations"), the Equity Transfer Agreement contains all the material terms of the EFA as disclosed in the section headed "2. The EFA" of the First Announcement with necessary modifications to reflect the fact that the Equity Transfer Agreement has been entered into and the EFA has been terminated as a result. For example, the Equity Transfer Agreement(s) Condition was not included in the Equity Transfer Agreement since such condition required that the Equity Transfer Agreement(s) be entered into but it becomes unnecessary for the purpose of the Equity Transfer Agreement as a result of the signing of the Equity Transfer Agreement.

2. Variations and supplements to the EFA

   The Equity Transfer Agreement included new terms principally for the purpose of supplementing the terms of the EFA, a summary of which is set out below:

3. under the EFA, if the No Breach by Vendor Condition is not fulfilled (or waived), the EFA and the Equity Transfer Agreement(s) shall be terminated and the Vendor shall pay the Prescribed Compensation to the Purchasers together with other monies paid by the Purchasers within five working days after the termination of the EFA and the Equity Transfer Agreement(s).

   Under the Equity Transfer Agreement, the consequence set out in the preceding paragraph applies only if the Vendor's breach relates to a breach of certain specified Vendor's warranties and the Vendor has not remedied the breach(es) within the reasonable period as requested by the Purchasers. The aforesaid specified Vendor's warranties are summarised as follows: (A) the approval of the board of directors of the Company of the Transactions had been obtained prior to the signing of the Equity Transfer Agreement; (B) all the information and documents provided to the Purchasers are true and complete; (C) the Vendor holds 100% of the equity interests of the Disposal Company free from encumbrances;

4. the Disposal Company shall be the sole owner of the Disposal Property from

   the date of signing of the Equity Transfer Agreement up to the Issuance Date;

5. prior to the Issuance Date, the Vendor shall coordinate with the Purchasers in relation to completing the application to the taxation authorities by the Disposal Company with regard to the simplified collection of the value-added taxes on the future leasing income of the Disposal Property (except that if the failure to complete the application is caused by the taxation authorities, the Vendor shall not be considered as having breached this warranty) ("Taxation Application Warranty"); and (F) compliance of the relevant requirements on anti-corruption and anti-bribery by the Vendor. In addition to the consequence set out in the preceding paragraph, the Vendor shall bear the relevant costs for remedying the breach(es). In the case of breach(es) of other Vendor's warranties, the Vendor should remedy the breach(es) within the reasonable period as requested by the Purchasers and bear the relevant costs, but the Purchasers shall not be entitled to terminate the Equity Transfer Agreement.

6. under the EFA, if the No Breach by Purchasers Condition is not fulfilled (or waived), (A) the EFA and the Equity Transfer Agreement(s) shall be terminated;

   (B) the Vendor shall be entitled to forfeit both the Equity Deposit and the Loan Deposit and (C) the Vendor shall return to the Purchasers other monies paid by the Purchasers other than the Equity Deposit and the Loan Deposit.

   Under the Equity Transfer Agreement, the consequence set out in the preceding paragraph applies only if the Purchasers' breach relates to a breach of certain specified Purchasers' warranties and the Purchasers have not remedied the breach(es) within the reasonable period as requested by the Vendor. The aforesaid specified Purchasers' warranties are summarised as follows: (I) the Purchasers have obtained all necessary approvals prior to the signing the Equity Transfer Agreement; (II) all the documents provided to the Vendor are true and complete;

   (III) the funds to be paid to the Vendor as consideration for the purchase of the Sale Equity are from legal source; and (IV) compliance of the relevant requirements on anti-corruption and anti-bribery by the Purchasers. In addition to the consequence set out in the preceding paragraph, the Purchasers shall bear the relevant costs for remedying the breach(es). In the case of breach(es) of other Purchasers warranties, the Purchasers should remedy the breach(es) within the reasonable period as requested by the Vendor and bear the relevant costs, but the Vendor shall not be entitled to terminate the Equity Transfer Agreement.

7. terms in relation to the handover of the Disposal Company, such as delivery of the originals of the certificates, permits and approvals of the Disposal Company;

8. terms in relation to the arrangement during the period from (x) the signing of the Equity Transfer Agreement and (y) the date on which the Vendor and the Purchasers signed the confirmation in relation to the handover of the Disposal Company and the Disposal Property, such as (A) the Vendor and the Purchasers shall form a joint working group through which they shall coordinate on the preparation of the handover of the Disposal Company and the Disposal Property;

   (B) the seals of the Disposal Company shall be used in a reasonable and cautious manner without affecting the interests of the Disposal Company and the Purchasers; (C) the Vendor shall not, without the Purchasers' prior written consent, enter into any agreement in the name of the Disposal Company (other than the written instruments for the purposes of terminating the agreements which will not be assumed by the Purchasers); and (D) any single expense exceeding RMB50,000 shall be subject to the prior written consent of the Purchasers;

9. additional representations and warranties given by the Vendor which are customary in transaction of similar nature, such as (A) all the information and documents provided to the Purchasers are true and complete; (B) as at the date of the Equity Transfer Agreement, the Disposal Company has paid taxes in accordance with the requirements of the national and local taxation authorities; and (C) the registered capital of the Disposal Company in the amount of RMB400,000,000 had been fully paid up; and

10. as disclosed in the section headed "2. The EFA - (j) Equity Transfer Agreement(s)" of the First Announcement, the Equity Transfer Agreement(s) would provide for the vacation and handover of the Disposal Property and the detailed terms in this connection. In this regard, the Equity Transfer Agreement (i) sets out the documents, information and other items in relation to the Disposal Property which the Vendor shall deliver to the Purchasers, such as the Disposal Property and the assets attached thereto, the building ownership certificates and the state-owned land use rights certificates; (ii) specifies that all ancillary facilities which are movable must have been removed; and (iii) sets out the factors for determination of whether the handover of the Disposal Property has been satisfied.

The Equity Variations are arrived at after arm's length negotiations among the Parties. The Directors are of the view that the Equity Variations as described in paragraph (b)(i) restrict the Purchasers' rights to terminate the Equity Transfer Agreement to breaches of the more material Vendor's warranties instead of any Vendor's warranty and is therefore in the interests of the Company and the Shareholders as a whole. It is also fair and reasonable to make similar supplements in relation to the consequence of breaches of the Purchasers' warranties. Other variations as described in paragraphs (b)(ii) to (vi) above are included to give more details to transaction of this nature to facilitate the implementation and performance of the Equity Transfer Agreement by the relevant Parties. The Directors are of the opinion that (i) the Equity Variations are in the interests of the Group and the Shareholders as a whole and that the terms of the Equity Variations are fair and reasonable so far as the Group and the Shareholders are concerned after taking into account the terms of the Transactions as a whole and that (ii) except for (A) the variations to the terms governing the consequences of the No Breach by Vendor Condition and the No Breach by Purchasers Condition being unfulfilled (or waived) as disclosed in paragraphs (b)(i) and (b)(ii) above; (B) the inclusion of the Taxation Application Warranty; and (C) the deletion of the Equity Transfer Agreement(s) Condition, a condition which becomes unnecessary as a result of the signing of the Equity Transfer Agreement, the Equity Transfer Agreement has not materially deviated from the EFA.