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SUNFONDA GROUP HOLDINGS LIMITED

新豐泰集團控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 01771) ANNOUNCEMENT DISCLOSEABLE TRANSACTION IN RELATION TO ACQUISITION OF EQUITY INTERESTS IN THE TARGET COMPANY

The Board wishes to announce that Shaanxi Sunfonda, an indirect wholly-owned subsidiary of the Company, entered into the Equity Transfer Agreement with Chongqing Zongshen on 31 August 2017 (after trading hours), pursuant to which Shaanxi Sunfonda has conditionally agreed to acquire the entire equity interests in the Target Company from Chongqing Zongshen.

As one or more of the applicable percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules exceeds 5% but less than 25%, the Acquisition contemplated under the Equity Transfer Agreement constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules.

INTRODUCTION

The Board wishes to announce that Shaanxi Sunfonda entered into the Equity Transfer Agreement with Chongqing Zongshen on 31 August 2017 (after trading hours), pursuant to which Shaanxi Sunfonda has conditionally agreed to acquire the entire equity interest in the Target Company from Chongqing Zongshen.

THE EQUITY TRANSFER AGREEMENT Date: 31 August 2017 Parties: (1) Shaanxi Sunfonda, as purchaser

(2) Chongqing Zongshen, as vendor

To the best of the Directors' knowledge, information and belief after having made all reasonable enquiry, Chongqing Zongshen and its ultimate beneficial owner are third parties independent of the Company and its respective connected persons.

Assets to be acquired: the entire equity interests of the Target Company held by Chongqing

Zongshen

Consideration for the Acquisition:

RMB48,000,000

The Consideration was determined after arm's length negotiations by Shaanxi Sunfonda, with reference to the unaudited consolidated financial statements of the Target Company for the year ended 31 December 2016 and the net asset value of the Target Company in the consolidated management accounts for the six months ended 30 June 2017.

The Consideration shall be payable by Shaanxi Sunfonda to Chongqing Zongshen in the following manner:

  1. RMB2,400,000, representing 5% of the Consideration, shall be paid as a deposit within 3 working days from the date when the Equity Transfer Agreement is entered into;

  2. RMB12,000,000, representing 25% of the Consideration, shall be paid within 3 working days from the date when due diligence is completed and the conditions precedent are fulfilled. The deposit shall become part of the Consideration after the completion of the above payment;

  3. Both parties shall enter into the equity transfer contract and relevant legal documents as required by the industrial and commercial bureau and pay RMB9,600,000, representing 20% of the Consideration, within 9 working days from the date when the Consideration in clause (2) is paid;

  4. RMB9,600,000, representing 20% of the Consideration, shall be paid within 3 working days after the completion of the change of business registration particulars in respect of the equity transfer; and

  5. RMB14,400,000, representing 30% of the Consideration, shall be paid within 3 working days after the Closing of the equity transfer of the Target Company.

    Shareholders loan: Shaanxi Sunfonda agrees to repay all the principal and interest of the

    borrowings owed to Chongqing Zongshen and the Related Companies of Chongqing Zongshen by the Target Company for the Target Company through the provision of loans to the Target Company, and the repayment shall be made within 3 working days after the completion of the change of business registration particulars in respect of the equity transfer.

    Conditions precedent: Completion of the Equity Transfer Agreement is subject to the

    fulfillment of the following conditions precedent:

    1. With 30 June 2017 as the base date of due diligence, if Shaanxi Sunfonda concludes through financial due diligence on the Target Company, that the net assets of Target Company are not less than or equal to RMB29,940,000, this condition precedent agreed under the Equity Transfer Agreement would be satisfied. If it is concluded, through financial due diligence on the Target Company, that the net assets of Target Company are less than RMB29,940,000, Shaanxi Sunfonda would have the option to acknowledge that the conditions precedent to the transaction have been satisfied, or otherwise negotiate with Chongqing Zongshen on the consideration under the Equity Transfer Agreement and enter into a relevant supplementary agreement.

    2. In respect of the two external financing (from Ping An Bank and BMW Finance, respectively) in the ordinary course of business of the Target Company, Shannxi Sunfonda will repay the utilized credit exposure under the two financing for the Target Company by way of the provision of loans to the Target Company before the change of business registration particulars in respect of the equity transfer.

      Other terms: The compensation liabilities shall be assumed in the manner as agreed

      below if the following events occur:

      1. If the result of due diligence conducted by Shaanxi Sunfonda or the final conclusion certified by competent authorities fails to meet the minimum limit, the parties shall negotiate with each other to determine a new consideration for the equity transfer or terminate the Equity Transfer Agreement, and Chongqing Zongshen shall refund to Shaanxi Sunfonda all the payments made by Shaanxi Sunfonda to Chongqing Zongshen.

        In the event that the conditions precedent are satisfied upon the conclusion of due diligence, (i) if the transaction under the Equity Transfer Agreement cannot be effected for reasons of Shaanxi Sunfonda, Shaanxi Sunfonda shall not be entitled to request Chongqing Zongshen to refund the deposit; (ii) if the transaction under the Equity Transfer Agreement cannot be effected for reasons of Chongqing Zongshen, Chongqing Zongshen shall refund to Shaanxi Sunfonda the deposit in double.

      2. If the transaction agreed under the Equity Transfer Agreement has not been effected due to reasons of either party to the agreement, the other party may terminate the agreement and require the payment of liquidated damages from the defaulting party.

      3. If Closing does not take place within ninety (90) working days from the date when the Equity Transfer Agreement is entered into (or such other period agreed by the parties in writing), either party may terminate the agreement.

      4. Closing: Chongqing Zongshen shall close the transaction with Shaanxi Sunfonda pursuant to the Equity Transfer Agreement upon receiving the full payment agreed in the above Consideration clause (4) within 3 working days after the date when change of business registration particulars is completed in respect of such equity transfer or such other period as agreed unanimously by the parties. REASON FOR, AND BENEFITS OF, THE ACQUISITION The Company

        The Company is a limited liability company incorporated in the Cayman Islands. The Company is a luxury and ultra-luxury automobile dealership group in Northwestern China, which has been listed in the main board of the Stock Exchange in 15 May 2014.

      Sunfonda Group Holdings Ltd. published this content on 01 September 2017 and is solely responsible for the information contained herein.
      Distributed by Public, unedited and unaltered, on 31 August 2017 23:52:06 UTC.

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