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.

SKYOCEAN INTERNATIONAL HOLDINGS LIMITED(Incorporated in Bermuda with limited liability)(Stock Code: 593) CONNECTED TRANSACTION DEBT RESTRUCTURING INVOLVING ISSUE OF CONVERTIBLE BONDSAs at the date of this announcement, an amount of RMB1,608,687,000 is due from SkyOcean Real Estate to SkyOcean Qian'an. The Board is pleased to announce that on 2 February 2015, the Capitalisation Agreement and the Share Purchase Agreement were entered into so as to effect the Debt Restructuring, which has the effect of replacing the Loan in the amount of RMB1,500,000,000 by the Convertible Bonds to be issued by the Company to SkyOcean Investment in a Hong Kong dollars amount equivalent to the Loan.The Capitalisation AgreementPursuant to the Capitalisation Agreement, the Loan in the amount of RMB1,500,000,000 due from SkyOcean Real Estate to SkyOcean Qian'an shall be capitalised. As a result of the Capitalisation, SkyOcean Real Estate will be indirectly held as to 76% by the Company and as to 24% by SkyOcean Qian'an.The Acquisition AgreementPursuant to the Share Purchase Agreement, SkyOcean Investment has undertaken to incorporate or acquire New BVI Co and New HK Co, and to procure New HK Co and SkyOcean Qian'an to enter into the Acquisition Agreement. Pursuant to the Acquisition Agreement, New HK Co, a company wholly-owned by SkyOcean Investment through New BVI Co, will acquire the 24% equity interest in SkyOcean Real Estate held by SkyOcean Qian'an.
 The Share Purchase AgreementPursuant to the Share Purchase Agreement, SkyOcean Investment has undertaken to incorporate or acquire New BVI Co and New HK Co, and to procure New HK Co and SkyOcean Qian'an to enter into the Acquisition Agreement. Further, the Company has conditionally agreed to purchase and SkyOcean Investment has conditionally agreed to sell the entire issued share capital of Ne w BVI Co at a consideration of HK$1,895,902,000 (approximately equivalent to the amount of the Loan), to be satisfied by (i) a promissory note in the amount of HK$252,787,000, which shall be mandatorily exchanged into the Convertible Bonds after the release of the Pledge Agreement; and (ii) the issue of the Convertible Bonds in the principal amount of HK$1,643,115,000.The Debt Restructuring is subject to the fulfilment of the respective conditions under the Capitalisation Agreement, the Acquisition Agreement and the Share Purchase Agreement. Accordingly, the Debt Restructuring may or may not proceed. Shareholders and potential investors are reminded to exercise caution when dealing in the Shares and securities of the Company. Listing Rules implicationsSkyOcean Qian'an is controlled as to 80% by Mr. Zhou, a Director and substantial shareholder of the Company, and as to 20% by Ms. Zhou, who was a Director in the last 12 months and also the sister of Mr. Zhou and the spouse of Mr. Liu Li, one of our Directors. SkyOcean Qian'an is an associate of Mr. Zhou and hence a connected person of the Company under the Listing Rules.
While the Capitalisation, the Acquisition and the acquisition by the Company of the entire issued share capital of New BVI Co will have no impact on the shareholding structure (other than the addition of the New BVI Co and New HK Co as wholly-owned subsidiaries) of the Group and SkyOcean Real Estate will remain to be a wholly-owned subsidiary of the Company after the Debt Restructuring, the issue of the Convertible Bonds to SkyOcean Investment, which is a controlling shareholder and therefore a connected person of the Company, will constitute a connected transaction of the Company under Chapter 14A of the Listing Rules and is subject to approval by the Independent Shareholders at the SGM.GeneralThe SGM will be convened for the purpose of considering, and if thought fit, approving the Capitalisation Agreement, the Acquisition Agreement, the Share Purchase Agreement, the transactions contemplated thereunder (including the issue of the Convertible Bonds) and the termination of the Undertakings.
A circular containing, among other things, details about the Capitalisation Agreement, the Acquisition Agreement, the Share Purchase Agreement, the issue of the Convertible Bonds, the Undertakings, the notice of SGM and other information as required under the Listing Rules is expected to be despatched to the Shareholders on or before 25 February 2015.BACKGROUNDAs at the date of this announcement, an amount of RMB1,608,687,000 is due from SkyOcean Real Estate to SkyOcean Qian'an. The Board is pleased to announce that on 2 February 2015, the Capitalisation Agreement and the Share Purchase Agreement were entered into so as to effect the Debt Restructuring, which has the effect of replacing the Loan in the amount of RMB1,500,000,000 by the Convertible Bonds to be issued by the Company to SkyOcean Investment in a Hong Kong dollars amount equivalent to the Loan.

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