Synertone Communication : 05/02/2016 PROPOSED SHARE CONSOLIDATION ，PROPOSED RIGHTS ISSUE AND APPLICATION FOR WHITEWASH WAIVER

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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.

This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities of the Company.

協 同 通 信 集 團 有 限 公 司

Synertone Communication Corporation

(incorporated in the Cayman Islands with limited liability)

(Stock code: 1613)

1. PROPOSED SHARE CONSOLIDATION;

2. PROPOSED RIGHTS ISSUE ON THE BASIS OF ONE RIGHTS SHARE FOR EVERY ONE CONSOLIDATED SHARE HELD

   ON THE RECORD DATE; AND

3. APPLICATION FOR WHITEWASH WAIVER

PROPOSED SHARE CONSOLIDATION

The Board proposes to implement the Share Consolidation on the basis that every five (5) issued and unissued Shares of HK$0.01 each will be consolidated into one (1) Consolidated Share of HK$0.05. The Share Consolidation is conditional upon, among other things, the approval of the Shareholders at the EGM.

PROPOSED RIGHTS ISSUE

Subject to, among other conditions, the Share Consolidation having become effective, the grant of the Whitewash Waiver and the approval by the Independent Shareholders at the EGM, the Company proposes to raise a minimum gross proceeds of HK$209.3 million, before expenses, by way of the Rights Issue of not less than 1,674,400,000 and not more than 1,829,279,995 Rights Shares to the Qualifying Shareholders at the Subscription Price of HK$0.125 per Rights Share on the basis of one (1) Rights Share for every one (1) Consolidated Share held on the Record Date. The Rights Issue is only available to the Qualifying Shareholders and will not be extended to the Excluded Shareholders.

The estimated net proceeds from the Rights Issue after deducting all necessary expenses are estimated to be approximately HK$207 million, which are intended to be used (i) as to approximately HK$160 million for the proposed acquisition of further equity interests in Sense Field Group Limited; and (ii) as to the remaining balance of approximately HK$47 million for general working capital of the Group. The net subscription price is estimated to be approximately HK$0.124 per Rights Share.

LISTING RULES IMPLICATIONS

As the Rights Issue will increase the issued share capital of the Company by more than 50%, under Rule 7.19(6) of the Listing Rules, the Rights Issue is subject to approval of the Independent Shareholders at the EGM by a resolution on which any controlling Shareholders and their respective associates or, where there are no controlling Shareholders, the Directors (excluding the independent non-executive Directors) and the chief executive of the Company, and their respective associates shall abstain from voting in favour of the Rights Issue. As no excess application for the Rights Shares is available under the Rights Issue and the Rights Issue is underwritten by Excel Time, who is a substantial shareholder of the Company, specific approval shall be obtained from the Independent Shareholders and those persons who have a material interest in the arrangement of the Rights Issue shall abstain from voting in respect of resolution relating to the Rights Issue at the EGM.

TAKEOVERS CODE IMPLICATIONS AND APPLICATION FOR WHITEWASH WAIVER

In the event that no Qualifying Shareholder (other than the Underwriter and parties acting in concert with it) takes up any Rights Shares under the Rights Issue, Excel Time, being the Underwriter, has agreed to subscribe for and take up a maximum of 1,829,279,995 Rights Shares that are not subscribed for under the Rights Issue pursuant to the Underwriting Agreement.

Accordingly, the subscription and underwriting of the Rights Shares under the Rights Issue by the Underwriter may result in its shareholdings in the Company being increased from approximately 14.69% of the existing issued share capital of the Company to approximately 57.35% of the then enlarged issued share capital of the Company immediately upon completion of the Rights Issue (assuming none of the outstanding Share Options and Warrants are exercised), or to approximately 56.73% of the then enlarged issued share capital of the Company immediately upon completion of the Rights Issue (if all the Vested Share Options and the outstanding Warrants are all exercised in full). If the total voting rights of the Underwriter and the parties acting in concert with it increases from below 30% as at the date of this announcement to more than 30%, the Underwriter would be required to make a mandatory general offer under Rule 26 of the Takeovers Code for all the Consolidated Shares and securities issued by the Company not already held by the Underwriter and parties acting in concert with it unless the Whitewash Waiver is granted.

An application will be made by the Underwriter to the Executive for the Whitewash Waiver pursuant to Note 1 on dispensations from Rule 26 of the Takeovers Code. The Whitewash Waiver, if granted by the Executive, would be subject to, among other things, the approval of the Independent Shareholders at the EGM by way of poll. The Underwriter and parties acting in concert with it and any Shareholders who are involved in or interested in the Underwriting Agreement, the Rights Issue and/or the Whitewash Waiver shall abstain from voting on the relevant resolutions at the EGM.

If the Whitewash Waiver is not granted by the Executive, the Rights Issue will not proceed.

GENERAL

The Independent Board Committee, comprising all the independent non-executive Directors, will be established to provide recommendation to the Independent Shareholders in connection with the Underwriting Agreement, the Rights Issue and the Whitewash Waiver. An independent financial adviser will be appointed with the approval of the Independent Board Committee to advise the Independent Board Committee and the Independent Shareholders in relation to the Underwriting Agreement, the Rights Issue and the Whitewash Waiver.

A circular containing, among other things, (i) further details of the Share Consolidation;

(ii) further details of the Rights Issue; (iii) the Whitewash Waiver; (iv) a letter of recommendation from the Independent Board Committee to the Independent Shareholders;

(v) a letter of advice from the independent financial adviser to the Independent Board Committee and the Independent Shareholders in relation to the Underwriting Agreement, the Rights Issue and the Whitewash Waiver; and (vi) a notice convening the EGM will be despatched by the Company to the Shareholders on or before 2 March 2016. As the expected date of despatch of the Circular is more than 21 days from the date of this announcement, an application will be made to the Executive for a waiver from strict compliance with Rule 8.2 of the Takeovers Code.

Subject to the fulfillment of certain conditions of the Rights Issue including the approval of the Independent Shareholders at the EGM and the grant of the Whitewash Waiver, the Company will despatch the Prospectus Documents containing, among other matters, details of the Rights Issue, to the Qualifying Shareholders. The Company will despatch the Prospectus to the Excluded Shareholders for their information only but the Company will not send the PAL to the Excluded Shareholders. For the avoidance of doubt, so long as the Excluded Shareholders are Independent Shareholders, they are entitled to vote at the EGM to approve the Underwriting Agreement, the Rights Issue and the Whitewash Waiver.

WARNING OF THE RISKS OF DEALING IN THE SHARES AND CONSOLIDATED SHARES

The Rights Issue is subject to, among other things, the fulfillment of the conditions set out in the paragraph headed ''Conditions of the Rights Issue'' below. In particular, it is subject to the grant of the Whitewash Waiver by the Executive and the Underwriting Agreement not being terminated in accordance with its terms. Accordingly, the Rights Issue may or may not proceed.

Shareholders should note that the Consolidated Shares will be dealt in on an ex- entitlement basis commencing from 23 March 2016 and that dealings in the Shares and/or the Consolidated Shares will take place while the conditions to which the Underwriting Agreement is subject to remain unfulfilled. Any Shareholder or other person dealing in the Shares and/or the Consolidated Shares from the date of this announcement up to the date on which all the conditions of the Rights Issue are fulfilled will accordingly bear the risk that the Rights Issue may not become unconditional or may not proceed. Any Shareholder or other person contemplating any dealings in the Shares and/or the Consolidated Shares, who is in any doubt about his/her/its position, is recommended to consult his/her/its own professional advisers.

(I) PROPOSED SHARE CONSOLIDATION

The Board proposes to implement the Share Consolidation on the basis that every five

(5) issued and unissued Shares of HK$0.01 each will be consolidated into one (1) Consolidated Share of HK$0.05.

Conditions of the Share Consolidation

The Share Consolidation is conditional upon the following conditions:

1. the passing of the necessary ordinary resolution(s) to approve the Share Consolidation by the Shareholders at the EGM;

   
   

2. the Stock Exchange granting approval to the listing of, and the permission to deal in, the Consolidated Shares to be issued upon the Share Consolidation becoming effective; and

   
   

3. the compliance with the necessary procedures and requirements under the Cayman Islands law and the Listing Rules to effect the Share Consolidation.

The Share Consolidation will become effective on the next business day immediately following the fulfillment of the above conditions.

Effects of the Share Consolidation

As at the date of this announcement, the authorised share capital of the Company amounted to HK$200,000,000 divided into 20,000,000,000 Shares, of which 8,372,000,000 Shares are in issue.

Upon the Share Consolidation becoming effective and on the basis that no further Shares will be allotted and issued or bought back prior thereto, the authorised share capital of the Company will become HK$200,000,000 divided into 4,000,000,000 Consolidated Shares of HK$0.05 each, of which 1,674,400,000 Consolidated Shares will be in issue, which are fully paid or credited as fully paid.

Upon the Share Consolidation becoming effective, the Consolidated Shares will rank pari passu in all respects with each other in accordance with the articles of association of the Company. Other than the expenses, including but not limited to the professional