Wharf () : Connected Transaction

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.

(Incorporated in Hong Kong with limited liability)

Stock Code: 4

The board of Directors wishes to announce that on 11 August 2014, the Purchaser, a wholly-owned subsidiary of the Company, and the Company (as the Purchaser's guarantor) entered into the Sale and Purchase Agreement with the Vendor, a wholly-owned subsidiary of Wheelock, to acquire (i) the entire issued share capital in the Target Company for a consideration of HK$2,688 million and (ii) the Shareholder Loan on a dollar-to-dollar basis, subject to the terms and conditions in the Sale and Purchase Agreement.
The Target Company is an investment holding company, and its principal asset is the 100% beneficial interests in Ridge Limited which holds the Property (details below) known as Crawford House in Queen's Road Central, Central, Hong Kong. For the purpose of this Transaction, the Property is valued at HK$5,790 million.
The Company is owned as to 54.8% by Wheelock as at the date of this announcement and the Vendor is a wholly-owned subsidiary of Wheelock. As a result, the Vendor is regarded as a connected person of the Company, and the Transaction constitutes a connected transaction for the Company under Chapter 14A of the Listing Rules. Given its size or value, the Transaction is subject to the announcement and reporting requirements for the Company but is exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

The board of Directors wishes to announce that on 11 August 2014, City State
Ventures Limited (a wholly-owned subsidiary of the Company) as the Purchaser and

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The Wharf (Holdings) Limited - Announcement

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the Company (as the Purchaser's guarantor) entered into the Sale and Purchase Agreement with Green Assets Group Limited (a wholly-owned subsidiary of Wheelock) as the Vendor, for the acquisition of the Sale Shares and the Shareholder Loan.

Date: 11 August 2014
Parties: Green Assets Group Limited as the Vendor
City State Ventures Limited as the Purchaser
The Wharf (Holdings) Limited as the Purchaser's guarantor
The subject matter:
The Sale Shares, i.e. 1,975 ordinary shares of US$1.00 each of the Target Company, representing 100% of its issued share capital, and the Shareholder Loan.
The combined net profits (before and after taxation and extraordinary items) attributable to Ridge Limited and the Target Company were about HK$711.6 million and HK$699.8 million for the financial year ended 31 December 2012 respectively, and were about HK$274.1 million and HK$258.9 million for the financial year ended
31 December 2013 respectively. The consolidated net asset value of the Target Company stated in its pro-forma financial statements as at the Completion Date is about HK$2,688 million.
The Property:
The principal asset that the Target Company holds is the 100% beneficial interest in Ridge Limited, which is the sole registered and beneficial owner of the Property. Details of the Property are as follows:
(a) Lot Number and Address, etc.:
ALL THAT piece or parcel of ground registered in the Land Registry as The Remaining Portion of Inland Lot No. 7 and The Remaining Portion of Section A of Inland Lot No. 45 TOGETHER with the messuages erections and buildings
thereon now known as Crawford House (卡佛大廈) at 64-70A Queen's Road
Central, Central, Hong Kong.
(b) Description:
Crawford House comprises a 23-storey commercial/office building over a basement erected on a site with a total site area of approximately 1,141.40 sq. m. (12,286 sq. ft.). The building was completed in 1977.

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Consideration and Payment Terms:
(i) HK$2,688 million for the Sale Shares, as determined by reference to the pro- forma consolidated net asset value of the Target Company as at the Completion Date (with the value of the Property restated at HK$5,790 million in accordance with the independent professional valuation report as at 30 June 2014), subject to adjustments for the actual amount in the Completion Accounts, of which HK$134.4 million, being 5% of the consideration for the Sale Shares, shall be paid in cash by the Purchaser to the Vendor on the date hereof and the balance of the consideration for the Sale Shares shall be paid in cash on Completion.
(ii) The Shareholder Loan owed by the Target Company to the Vendor as at the Completion Date shall be fully payable in cash by the Purchaser to the Vendor at Completion on a dollar-to-dollar basis. As at 31 July 2014, the Shareholder Loan was approximately HK$66 million.
The Transaction was negotiated on an arm's length basis and the Group will pay the
Consideration and the Shareholder Loan with its internal resources and borrowings. Guarantee:
The Company, as the Purchaser's guarantor, has guaranteed to the Vendor the due performance and discharge by the Purchaser of all obligations due, owing or incurred to the Vendor by the Purchaser under or pusuant to the Sale and Purchase Agreement ("Purchaser's Obligations") to the intent that should the Purchaser fail duly and punctually to perform or discharge any of the Purchaser's Obligations, the guarantor shall upon demand perform and discharge or procure the performance and discharge of the Purchaser's Obligations.
The Company agreed to provide a new guarantee in respect of the Bank Facility, of which the outstanding balance as at 31 July 2014 was HK$3,000 million, in substitution for the existing guarantee previously given by Wheelock for guaranteeing Ridge Limited's obligations relating to the Bank Facility.
Completion:
Completion shall take place on or before 10 September 2014, or such date as agreed between the Purchaser and the Vendor.
Completion Accounts and Adjustment to the Consideration:
The Completion Accounts will be prepared as at the Completion Date. In the event that the final Consideration calculated with reference to the Completion Accounts is different from the pre-adjusted Consideration, either the Vendor shall repay the difference of the amount to the Purchaser or the Purchaser shall pay the difference of the amount to the Vendor (as the case may be) within 14 days of production of the Completion Accounts.

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The Target Company is a company incorporated in British Virgin Islands having an issued share capital of US$1,975.00, fully paid up, representing the Sale Shares to be sold to the Purchaser under the Sale and Purchase Agreement. The Target Company was established by the Vendor as its wholly-owned subsidiary with an original book cost of HK$2,140 million.
The Target Company is an investment holding company, and its principal asset is the
100% beneficial interest in Ridge Limited, which is the sole registered and beneficial owner of the Property.

The Directors believe that the Transaction offers an opportunity for making a viable and profitable investment, which will broaden the investment property portfolio of the Group and is beneficial to the Company and its shareholders as a whole.

At the date of this announcement, the Company is owned as to 54.8% by Wheelock and the Vendor is a wholly-owned subsidiary of Wheelock. As a result, the Vendor is regarded as a connected person of the Company, and the Transaction constitutes a connected transaction for the Company under Chapter 14A of the Listing Rules. Since one or more of the applicable percentage ratios calculated under Rule 14.07 of the Listing Rules is/are greater than 0.1% whilst all such ratios are less than the 5% threshold, the Transaction is subject to the announcement and reporting requirements for the Company but is exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

The principal business activities of the Group are ownership of properties for development and letting, investment holding, container terminals as well as communication, media and entertainment. Following completion of this Transaction, the Target Company together with its wholly-owned subsidiary will be transferred to and under the control of the Company.
The principal business activity of the Vendor is investment holding.
The Directors (except three Directors who abstained from participating in the approval of the relevant resolutions of the board of Directors, namely, Hon. Peter K. C. Woo, Mr. Stephen T. H. Ng and Mr. Paul Y. C. Tsui, each being also a director of Wheelock and a holder of certain interests in Wheelock are being considered having a material interest and/or conflict of interest in the Transaction), including the Independent Non- executive Directors of the Company, believe that the Transaction is on normal commercial terms with reference to the prevailing market conditions, and the terms of the Transaction are fair and reasonable and in the interests of the Company and its shareholders as a whole, and the Transaction was entered into in the ordinary and usual course of business of the Group after due negotiation on an arm's length basis.

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As at the date of this announcement, the Board comprises Hon. Peter K. C. Woo, Mr. Stephen T. H. Ng, Mr. Andrew O. K. Chow, Ms. Doreen Y. F. Lee, Mr. T. Y. Ng, Mr. Paul Y. C. Tsui and Ms. Y. T. Leng, together with eight Independent Non-executive Directors, namely, Mr. Alexander S. K. Au, Professor Edward K. Y. Chen, Dr. Raymond K. F. Ch'ien, Hon. Vincent K. Fang, Mr. Hans Michael Jebsen, Mr. Wyman Li, Mr. David M. Turnbull and Professor E. K. Yeoh.

Unless the context otherwise requires, capitalised terms used in this announcement shall have the following meanings:
"Bank Facility" the term loan facility of HK$3,000 million for Ridge Limited as borrower, with DBS Bank Ltd. (as mandated lead arranger and bookrunner) and DBS Bank Ltd., Hong Kong Branch (as the original lender and facility agent)
"Board" the board of Directors of the Company
"Company" The Wharf (Holdings) Limited (stock code: 4), a 54.8%- owned subsidiary of Wheelock incorporated in Hong Kong with limited liability, the shares of which are listed on the Stock Exchange
"Completion" completion of the Transaction in accordance with the terms of the Sale and Purchase Agreement
"Completion Accounts" the consolidated income statement for the period up to the Completion Date, and the consolidated statement of financial position of the Target Company as at the Completion Date together with the notes thereto as prepared in accordance with the terms of the Sale and Purchase Agreement
"Completion Date" the date on which Completion takes place, i.e. on or before 10 September 2014, or such date as agreed between the Purchaser and the Vendor
"connected person" shall have the same meaning ascribed to the Listing
Rules
"Consideration" means (i) HK$2,688 million for the Sale Shares, being the consideration for the acquisition of the Sale Shares subject to adjustments under the Completion Accounts and (ii) the Shareholder Loan on a dollar-to-dollar basis
"Director(s)" director(s) of the Company for the time being
"Group" the Company together with its subsidiaries

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"Listing Rules" the Rules Governing the Listing of Securities on the
Stock Exchange
"Property" means the piece of land situated at 64-70A Queen's Road Central, Central, Hong Kong and registered as The Remaining Portion of Inland Lot No. 7 and The Remaining Portion of Section A of Inland Lot No. 45 and all erections and buildings thereon, known as
Crawford House (卡佛大廈), details of which are set out
above in this announcement
"Purchaser" City State Ventures Limited, a company incorporated in British Virgin Islands with limited liability, and being a wholly-owned subsidiary of the Company
"Ridge Limited" Ridge Limited, a company incorporated in Hong Kong with limited liability, and being a wholly-owned subsidiary of the Target Company
"Sale and Purchase
Agreement"
a sale and purchase agreement dated 11 August, 2014 entered into between the Vendor and the Purchaser in relation to the Transaction
"Sale Shares" 1,975 ordinary shares of US$1.00 each of the Target Company, representing 100% of the issued share capital of the Target Company
"Shareholder Loan" the amount of the shareholder's loan owed by the Target
Company to the Vendor as at the Completion Date
"Stock Exchange" The Stock Exchange of Hong Kong Limited
"Target Company" Lucky Bay Investments Limited, a company incorporated in British Virgin Islands with limited liability, and being a wholly-owned subsidiary of the Vendor
"Transaction" the acquisition by the Purchaser of the entire issued share capital of the Target Company and the shareholder loan owed by the Target Company to the Vendor pursuant to the Sale and Purchase Agreement
"Vendor" Green Assets Group Limited, a company incorporated in British Virgin Islands with limited liability, and being a wholly-owned subsidiary of Wheelock
"Wheelock" Wheelock and Company Limited (stock code: 20), a company incorporated in Hong Kong with limited liability, the shares of which are listed on the Stock Exchange

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"HK$" Hong Kong dollar, the lawful currency of Hong Kong
"US$" United States dollar, the lawful currency of the United
States
By order of the Board

Hong Kong, 11 August 2014

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