TA Yang : MAJOR TRANSACTION DISPOSAL OF 100% EQUITY INTEREST IN DONGGUAN TAI YANG RUBBER PLASTIC INDUSTRIAL COMPANY LIMITED

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TA YANG GROUP HOLDINGS LIMITED

大 洋 集 團 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1991)

MAJOR TRANSACTION DISPOSAL OF 100% EQUITY INTEREST IN

DONGGUAN TAI YANG RUBBER PLASTIC INDUSTRIAL COMPANY LIMITED

MAJOR TRANSACTION

The Board wishes to announce that on 11 October 2017 (before trading hours), the Seller (an indirect wholly-owned subsidiary of the Company) and the Purchaser entered into the Sale and Purchase Agreement, pursuant to which the Seller conditionally agreed to sell and the Purchaser conditionally agreed to purchase the entire issued share capital of the Target Company for the total Consideration of HK$55,783,623.

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios in respect of the Disposal as calculated under Rule 14.07 of the Listing Rules exceed(s) 25% but is/are less than 75%, the Disposal constitutes a major transaction of the Company under Chapter 14 of the Listing Rules and is subject to the reporting, announcement and shareholders' approval requirements. To the best of the Directors' knowledge and information, and having made all reasonable enquiries, no Shareholder has any material interest in the Disposal. As such, no Shareholder is required to abstain from voting if a general meeting of the Company were convened to approve the Disposal. The Company has obtained a written approval from Lyton Maison Limited, the controlling Shareholder holding 436,540,400 Shares with voting rights (representing approximately 50.11% of the 871,178,000 Shares with voting rights in issue as at the date of this announcement), in respect of the Disposal. Pursuant to Rule 14.44 of the Listing Rules, such written approval from Lyton Maison Limited can be accepted in lieu of holding a general meeting for the purpose of approving the Disposal.

The Board wishes to announce that on 11 October 2017 (before trading hours), the Seller (an indirect wholly-owned subsidiary of the Company) and the Purchaser entered into the Sale and Purchase Agreement, pursuant to which the Seller conditionally agreed to sell and the Purchaser conditionally agreed to purchase the entire issued share capital of the Target Company for the total Consideration of HK$55,783,623.

THE SALE AND PURCHASE AGREEMENT

Major terms of the Sale and Purchase Agreement are set out below.

Date

11 October 2017 (before trading hours)

Parties

Seller: Elegant Giant Holdings Limited (an indirect wholly-owned subsidiary of the Company); and

Purchaser: Ta Yang UDE Limited.

To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, each of the Purchaser and its ultimate beneficial owner(s) is an Independent Third Party.

Subject matter

Subject to the terms and conditions of the Sale and Purchase Agreement, the Seller conditionally agreed to sell and the Purchaser conditionally agreed to purchase the entire issued share capital of the Target Company for a purchase price of HK$100,000 (the ''Purchase Price'').

Consideration

The Purchase Price of HK$100,000 shall be payable by the Purchaser to the Seller in cash in the following manner:

1. a sum of HK$50,000 shall be payable by the Purchaser in cash as non-refundable deposit (the ''Deposit'') within five (5) business days after the date of the Sale and Purchase Agreement; and

2. the remaining balance of the Purchase Price in the sum of HK$50,000 shall be settled by the Purchaser in cash within five (5) business days after completion of registration of change with the relevant industry and commerce administration authority in the PRC in respect of the Disposal (the ''Industry and Commerce Registration'').

The Purchase Price was determined between the Seller and the Purchaser after arm's length negotiations with reference to the unaudited net asset value of the Target Company as at 1 October 2017.

As of 1 October 2017, the Target Company owed non-trading debts to the Seller and its other subsidiaries (the ''Debt''). Pursuant to the Sale and Purchase Agreement, the Purchaser has undertaken to (i) on the date of the Sale and Purchase Agreement, provide HK$30,000,000 to the Target Company; and (ii) within five (5) business days after completion of the Industry and Commerce Registration, provide HK$10,000,000 to the Target Company, as shareholder loans for the purpose of partial repayment of the Debt. The Purchaser and the Seller shall procure the Target Company to, within five (5) business days after receipt of the said shareholder loans from the Purchaser, transfer the entire amount of HK$40,000,000 (the ''Repayment Money'') to an account designated by the Seller.

In addition, as of 1 October 2017, the Target Company had a cash balance of approximately HK$15,683,623 in its bank account(s) (the final balance of which shall be based on the bank statement(s) issued by the relevant bank(s) as at 1 October 2017) (the ''Cash Balance''). Pursuant to the Sale and Purchase Agreement, the Purchaser and the Seller have agreed to allow the Seller to draw the entire amount of the Cash Balance from the bank account(s) of the Target Company for the purpose of partial repayment of the Debt and the Purchaser shall also deposit a sum equivalent to the Cash Balance to the bank account(s) of the Target Company before completion of the Industry and Commerce Registration to ensure that the Seller will be able draw the entire amount of the Cash Balance from the bank account(s) of the Target Company.

Pursuant to the Sale and Purchase Agreement, the Seller has agreed not to recover the remaining balance of the Debt (after deducting the Repayment Money and the Cash Balance) for a period of three years after the date of Completion and the Purchaser has agreed not to recover any non-trading debts owed to the Target Company by the Seller and its other subsidiaries for a period of three years after the date of Completion.

Based on the above, the total consideration (the ''Consideration'') to be received by the Seller for the Disposal shall be HK$55,783,623, being the sum of the Purchase Price, the Repayment Money and the Cash Balance. Having considered the reasons for and benefits of the Disposal as described in the section headed ''Reasons for and benefits of the Disposal'' in this announcement, the Directors consider that the Consideration is fair and reasonable and the Disposal is in the interest of the Company and the Shareholders as a whole.

Conditions precedent and Completion

Pursuant to the Sale and Purchase Agreement, Completion shall take place on the day on which the last of the following conditions (the ''Conditions'') has been satisfied:

1. the Sale and Purchase Agreement having been duly executed by the Seller and the Purchaser;

2. the Deposit having been paid by the Purchaser;

3. the Company having obtained written approval from its controlling Shareholder approving the Disposal;

4. if required, approval of the Stock Exchange in respect of the Disposal having been obtained; and

5. the Purchaser having completed the Industry and Commerce Registration in accordance with the relevant PRC laws and regulations.

As at the date of this announcement, the Conditions set out in paragraphs (i) and (iii) above have been satisfied, and the parties to the Sale and Purchase Agreement are not aware of any facts or circumstances that will render the remaining Conditions not to be satisfied.

Upon Completion, the Seller will no longer has any interest in the Target Company, and the Target Company will cease to be a subsidiary of the Company and its financial results will cease to be consolidated into the financial statements of the Group.

INFORMATION ON THE TARGET COMPANY

The Target Company is a company established in the PRC and is wholly-owned by the Seller as at the date of this announcement.

Set out below is the unaudited consolidated financial information of the Target Company for the two years ended 31 July 2016 and 2017:

For the year

ended 31 July 2017

For the year

ended 31 July 2016

(unaudited) (unaudited)

(HK$'000) (HK$'000)

(approximately) (approximately)

As at 31 July 2017, the unaudited net liabilities of the Target Company was approximately HK$3,060,000. The aforesaid unaudited financial information of the Target Company is for illustration purposes and is prepared based on the management accounts of the Target Company.

INFORMATION ON THE PURCHASER

The Purchaser is a company incorporated in Samoa with limited liability and is principally engaged in investment holding.

INFORMATION ON THE COMPANY

The Group is principally engaged in designing, manufacturing and sale of silicone rubber input devices, mainly used in consumer electronic devices, keypads for computers and notebooks, mobile phone handsets and automotive peripheral products. As part of its commitment to broadening its business model and diversifying its income streams, the Group has also penetrated into the healthcare real estate industry, by acquiring a multi- purpose leisure project in Yalong Bay, Hainan, the PRC that is currently operating as a high- end holiday resort with on-site healthcare services.