Shimao Property : Discloseable Transaction - Disposal of 100% equity interest in the Target Company involving the formation of Joint Venture

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SHIMAO PROPERTY HOLDINGS LIMITED

世茂房地產控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 813) DISCLOSEABLE TRANSACTION DISPOSAL OF 100% EQUITY INTEREST IN THE TARGET COMPANY INVOLVING THE FORMATION OF JOINT VENTURE THE DISPOSALS

The Board wishes to announce that on 21 June 2016, the Vendor (an indirect wholly-owned subsidiary of the Company) entered into the Agreements with the Purchasers respectively, whereby the Vendor agreed to transfer in aggregate the entire equity interest in the Target Company (i.e. 50% equity interest in the Target Company to each of the Purchasers).

As at the date of the Agreements, the JV Company, through the Target Company and its fellow subsidiaries of the Company, is indirectly wholly owned by the Company. The Disposals are intended to facilitate the formation of a joint venture such that, after completion of the Disposals, the JV Company would be respectively indirectly held as to 43.2% by the Purchasers in aggregate and as to 56.8% by the Company.

LISTING RULES IMPLICATIONS

As one of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) in respect of the Disposals (on an aggregated basis as if the Disposals were one transaction) exceeds 5% but is less than 25%, the Disposals, on an aggregated basis, constitute a discloseable transaction of the Company and are subject to notification and announcement requirements under Chapter 14 of the Listing Rules. Pursuant to Rule 14.04(1)(f) of the Listing Rules, the formation of the joint venture contemplated under the Agreements is exempt from the requirements of Chapter 14 of the Listing Rules.

THE DISPOSALS Background

On 21 June 2016, the Vendor (an indirect wholly-owned subsidiary of the Company) entered into Agreement-I with Purchaser A, whereby the Vendor agreed to sell, and Purchaser A agreed to purchase, 50% equity interest in the Target Company on and subject to the terms and conditions of Agreement-I.

On the same date, the Vendor entered into Agreement-II with Purchaser B, whereby the Vendor agreed to sell, and Purchaser B agreed to purchase, 50% equity interest in the Target Company on and subject to the terms and conditions of Agreement-II.

To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, each of the Purchasers and its ultimate beneficial owners is a third party independent of the Company and its connected persons (as defined in the Listing Rules). Both of the Purchasers are principally engaged in industrial investment and investment management.

Consideration

As at the date of the Agreements, the registered capital of the Target Company is RMB5 million and none of which has been paid up. Pursuant to the Agreements, each of Purchaser A and Purchaser B respectively undertakes to, after completion of the respective Disposals, contribute such amount of capital pro-rata to their equity holding in the Target Company.

Having taken into account the fact that the Vendor has not made any actual contribution in respect of the equity interest in the Target Company and the Target Company has not commenced business operation, in consideration of the above undertakings, the cash consideration for each of the Transfers is determined to be nil after arm's length negotiations between the respective parties of the Agreements. It is expected that no gain or loss will be recorded by the Group as a result of the Disposals and the Company will also cease to have any interest in the Target Company.

Completion

Pursuant to the Agreements, the respective parties agreed to ensure completion of registrations with the relevant government authorities in respect of the relevant part of the Disposed Equity within 10 days after the signing of the Agreements, upon which completion of the Disposals will take place and thereafter the Target Company will cease to be a subsidiary of the Company.

INFORMATION ON THE TARGET COMPANY AND THE JV COMPANY

The Target Company is a company established in the PRC with limited liability and is indirectly wholly owned by the Company as at the date of this announcement. As at the date of this announcement, the Target Company is principally engaged in investment holding and the only investment held by the Target Company is the 43.2% equity interest in the JV Company.

As at the date of this announcement, the JV Company, through the Target Company and its fellow subsidiaries of the Company, is wholly owned by the Company with registered capital of RMB7,700 million (of which RMB4,373.6 million, representing 56.8% of the registered capital has been paid up and contributed by the Group (other than the Target Company)) and the capital contribution by the Target Company of such registered capital in respect of its equity interest in the JV Company is still unpaid as at the date of the Agreements). The Disposals are intended to

facilitate the formation of a joint venture such that, after completion of the Disposals, the JV Company will be indirectly held as to 43.2% by the Purchasers in aggregate and as to 56.8% by the Company. The JV Company will continue to be a subsidiary of the Company.

The JV Company is a single purpose company recently established in 1 June 2016 in the PRC with limited liability for the acquisition, holding and the development of the Land, which the JV Company has the right to purchase at the consideration of RMB8,800,000,000. As at the date of the Agreements, the JV Company has no assets other than such right to acquire the Land.

REASONS FOR, AND BENEFITS OF, THE DISPOSALS

The Group is a large-scale developer and owner of high quality real estate projects in the PRC. The Group specialises in developing mid- to high-end residential, retail and office properties for sale and also attractive and well-located hotel, retail and office properties for long term investment holding purposes.

The formation of a joint venture by way of the Disposals will result in the Purchasers sharing the development cost of the Land, thereby sharing both the risks and financing thereof. The Group's cash flow position will benefit from a lower capital requirement to develop the Land.

The Directors are of the view that the Agreements and the transactions contemplated thereunder are in the interests of the Company and the terms of the Agreements are on normal commercial terms, and are fair and reasonable and in the interests of the shareholders of the Company as a whole.

LISTING RULES IMPLICATIONS

As one of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) in respect of the Disposals (on an aggregated basis as if the Disposals were one transaction) exceeds 5% but is less than 25%, the Disposals, on an aggregated basis, constitute a discloseable transaction of the Company and are subject to notification and announcement requirements under Chapter 14 of the Listing Rules.

Pursuant to Rule 14.04(1)(f) of the Listing Rules, the formation of the joint venture contemplated under the Agreements is exempt from the requirements of Chapter 14 of the Listing Rules for the following reasons:

1. the joint venture arrangement contemplated under the Agreements is to develop the Land to be held by the JV Company. The JV Company is and will be engaging in a single purpose project which is of a revenue nature in the ordinary and usual course of business of the Group;

2. the above joint venture arrangement is on an arm's length basis and on normal commercial terms; and

3. each of the Purchasers will procure the Target Company to enter into relevant agreement(s) with the JV Company and the shareholders of the JV Company which shall contain clauses to the effect that the JV Company may not, without the unanimous consent of the shareholders of the JV Company (i) change the nature or scope of the business of the JV Company; or (ii) enter into any transactions which are not on an arm's length basis.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions shall have the meanings set out below:

"Agreements" the two equity transfer agreements entered into between the Vendor on the one part and Purchaser A and Purchaser B, respectively, on the other part, both dated 21 June 2016, in relation to the Disposals; such two agreements are referred as "Agreement-I" and "Agreement-II" respectively

"Board" the board of Directors

"Company" Shimao Property Holdings Limited, a company incorporated under the laws of the Cayman Islands, the issued shares of which are listed on the Stock Exchange

"Director(s)" director(s) of the Company

"Disposals" the transfer of the Disposed Equity by the Vendor to the Purchasers on and subject to the terms and conditions of the Agreements

"Disposed Equity" in aggregate the entire equity interest in the Target Company held by the Vendor as at the date of the Agreements

"Group" the Company and its subsidiaries

"Purchasers" collectively, Purchaser A and Purchaser B

"Purchaser A"嘉興誠融投資合伙企業(有限合夥) (Jiaxing Chengrong Investment Limited Partnership*), a limited partnership established in the PRC, being the purchaser under Agreement-I

"Purchaser B" 嘉興安瑞投資合夥企業 (有限合夥) (Jiaxing Anrui Investment Limited Partnership*), a limited partnership established in the PRC, being the purchaser under Agreement-II

"Hong Kong" the Hong Kong Special Administrative Region of the People's Republic of China

"JV Company" 南京世茂新領航置業有限公司 (Nanjing Shimao New Pilot Real Estate Co., Ltd.*), a company established in the PRC with limited liability, which is an indirect wholly-owned subsidiary of the Company as at the date of the Agreements

"Land" A parcel of land (no. 2016G11) located at No. 5 Jiang Dong, The North of Hexi, Jianye District, Nanjing, the PRC for use of commercial, office and residential development

"Listing Rules" the Rules Governing the Listing of Securities on the Stock Exchange "PRC" The People's Republic of China