Shimao Property : Discloseable Transactions – (1) Disposal of Equity Interest in Fortune Times and (2) Disposal of Equity Interest in New Century

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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 TRANSACTIONS

1. DISPOSAL OF EQUITY INTEREST IN FORTUNE TIMES AND
2. DISPOSAL OF EQUITY INTEREST IN NEW CENTURY

THE EQUITY TRANSFER AGREEMENT

The Board wishes to announce that Shimao Wonderland and Shimao Business Management (each, a non wholly-owned subsidiary of the Company) entered into the Equity Transfer Agreement and the Supplemental Agreement with Leshi Holdings, pursuant to which (i) Shimao Wonderland has agreed to sell, and Leshi Holdings has agreed to acquire, the entire equity interest in Fortune Times; and (ii) Shimao Business Management has agreed to sell, and Leshi Holdings has agreed to acquire, the entire equity interest in New Century, at the respective consideration of approximately RMB2,920,000,000 and approximately RMB52,000,000, both subject to adjustments.

LISTING RULES IMPLICATIONS

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

The Board wishes to announce that Shimao Wonderland and Shimao Business Management (each, a non wholly-owned subsidiary of the Company) entered into the Equity Transfer Agreement and the Supplemental Agreement with Leshi Holdings, pursuant to which (i) Shimao Wonderland has agreed to sell, and Leshi Holdings has agreed to acquire, the entire equity interest in Fortune Times; and (ii) Shimao Business Management has agreed to sell, and Leshi Holdings has agreed to acquire, the entire equity interest in New Century.

Principal terms of the Equity Transfer Agreement (as amended and varied by the Supplemental Agreement) are set out below:

THE EQUITY TRANSFER AGREEMENT Date

11 May 2016 (as amended and varied by the Supplemental Agreement on 12 May 2016)

Parties

1. Leshi Holdings (as purchaser);

2. Shimao Wonderland (as vendor of the FT Transaction); and

3. Shimao Business Management (as vendor of the NC Transaction).

To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, each of Leshi Holdings and its ultimate beneficial owners is a third party independent of the Company and its connected persons (as defined in the Listing Rules).

Assets to be disposed of

1. Shimao Wonderland has agreed to sell, and Leshi Holdings has agreed to acquire, the entire equity interest in Fortune Times; and

2. Shimao Business Management has agreed to sell, and Leshi Holdings has agreed to acquire, the entire equity interest in New Century.

Consideration

Subject to the consideration adjustment mechanisms as detailed in the sub-section headed "Adjustment to the Consideration" below, the aggregate consideration of the Transactions shall be approximately RMB2,972,000,000, comprising the FT Consideration of approximately RMB2,920,000,000 and the NC Consideration of approximately RMB52,000,000.

The initial consideration for the Transactions shall be satisfied according to the following schedule, which shall be revised by the respective purchaser and vendor under the Transactions subject to conditions:

1. in respect of the FT Transaction, an amount of RMB838,000,000 shall be paid by Leshi Holdings on or before 25 June 2016;

2. in respect of the NC Transaction, an amount of RMB10,000,000 payable by Leshi Holdings has been settled by the earnest money paid by it prior to the date of the Equity Transfer Agreement; and

3. the balance of the FT Consideration and the NC Consideration shall be settled by Leshi Holdings in stages in accordance with the terms and conditions of the Equity Transfer Agreement before the FT Completion Date or (as the case may be) the NC Completion Date.

Each of the FT Consideration and the NC Consideration was arrived at after arm's length negotiations between Leshi Holdings and the Group after taking into account (i) the consideration adjustment mechanisms as detailed in the sub-section headed "Adjustment to the Consideration" below; and (ii) the market value of the Property as at 31 December 2015 as appraised by the independent property valuer.

Adjustment to the Consideration

Where applicable, each of the FT Consideration and the NC Consideration shall be adjusted in the following manner:

1. where Fortune Times or (as the case may be) New Century records a profit in its ordinary course of business as shown in the Completion Accounts, the FT Consideration or (as the case may be) the NC Consideration shall be adjusted upward on a dollar-to-dollar basis; and

2. where Fortune Times or (as the case may be) New Century records a loss in its ordinary course of business as a shown in the Completion Accounts, the FT Consideration or (as the case may be) the NC Consideration shall be adjusted downward on a dollar-to-dollar basis.

During the period commencing from the FT Completion Date or (as the case may be) the NC Completion Date to 31 December 2020, where any unrecognised tax losses of Fortune Times or (as the case may be) New Century have been used or deemed to be used to offset against future taxable income, the FT Consideration or (as the case may be) the NC Consideration shall be adjusted upward in accordance with the terms and conditions of the Equity Transfer Agreement.

Subject to the terms and conditions of the Equity Transfer Agreement, the FT Consideration shall also be adjusted downward by any difference between the value-added tax previously paid and assessed to be payable by Fortune Times in respect of the Property in the future.

Completion

Completion of the Transactions will take place upon the registrations with the relevant government authorities in respect of the transfer of relevant entire equity interests. Immediately after the FT Completion and/or (as the case may be) the NC Completion, each of Fortune Times and New Century will cease to be a subsidiary of the Company and the Company will cease to have any interest in Fortune Times or New Century.

INFORMATION ON FORTUNE TIMES AND NEW CENTURY

Each of Fortune Times and New Century is a company established in the PRC with limited liability and is wholly owned by Shanghai Shimao, which in turn is indirectly owned as to approximately 58.92% of equity interests by the Company as at the date of this announcement. As at the date of this announcement, Fortune Times is principally engaged in property development while New Century is principally engaged in the sale of food and provision of greening services.

Financial Information of Fortune Times

Set out below is a summary of certain audited financial information of Fortune Times for the years ended 31 December 2015 and 31 December 2014:

For the year ended 31 December
2015	2014
Approximately	Approximately
(RMB'000)	(RMB'000)
Turnover	5,742	6,034
Net (loss)/profit before taxation	(63,189)	42,635
Net (loss)/profit after taxation	(47,397)	45,310

The unaudited total asset value and net asset value of Fortune Times as at 31 March 2016 were approximately RMB4,060,200,000 and approximately RMB2,548,940,000 receptively. As at the date of this announcement, Fortune Times owns the Property (excluding certain car park lots and warehouses thereof which have been sold and/or contracted to sell to New Century and/or certain third parties).

Financial Information of New Century

Set out below is a summary of certain audited financial information of New Century for the years ended 31 December 2015 and 31 December 2014:

For the year ended 31 December
2015	2014
Approximately	Approximately
(RMB'000)	(RMB'000)
Turnover	77,455	84,137
Net profit before taxation	39,149	36,215
Net profit after taxation	29,345	27,148

The unaudited total asset value and net asset value of New Century as at 31 March 2016 were approximately RMB142,020,000 and approximately RMB52,400,000 respectively.

REASONS FOR, AND BENEFITS OF, THE TRANSACTIONS

The Group is primarily engaged in property development, property investment and hotel operation in the PRC.

Leshi Holdings is principally engaged in project investment, investment management, asset management and provision of investment and trade consultancy service.

Upon the FT Completion and the NC Completion, it is expected that Shanghai Shimao will record a book gain of approximately RMB700,000,000 as a result of the Transactions. The actual gain or loss in connection with the Transactions will be assessed after the completion and is subject to audit.

The Directors consider that the Transactions represent good opportunities for Shanghai Shimao to realise its investment in Fortune Times and New Century (including the Property). It is intended that the net proceeds from the Transactions will be used as general working