Yuexiu Property : DISCLOSEABLE TRANSACTION AND INSIDE INFORMATION - PROPOSED DISPOSAL OF 2% EQUITY INTEREST IN GUANGZHOU HONG SHENG PROPERTY DEVELOPMENT CO., LTD. (in PDF)

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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.

(Incorporated in Hong Kong with limited liability)

(Stock Code: 00123) DISCLOSEABLE TRANSACTION AND INSIDE INFORMATION PROPOSED DISPOSAL OF 2% EQUITY INTEREST IN GUANGZHOU HONG SHENG PROPERTY DEVELOPMENT CO., LTD.* DISCLOSEABLE DISPOSAL AND INSIDE INFORMATION

The Company is pleased to announce that the Seller, Guangzhou Lianheng and the Purchaser entered into the 2% Equity Transfer Agreement pursuant to which the Seller agreed to sell, and the Purchaser agreed to purchase, 2% of the equity interest in the Project Company for a consideration of RMB94,999,000. Simultaneously, the Loan Assignor, the Purchaser, the Project Company and the Seller entered into the 2% Loan Assignment Agreement pursuant to which the Loan Assignor agreed to assign, and the Purchaser agreed to accept the assignment of, the 2% Loan on a dollar-for-dollar basis.

The Total Consideration for the 2% Disposal payable by the Purchaser to the Seller and the Loan Assignor, calculated based on the assumption that the entire amount owing from the Project Company to the Loan Assignor and its Affiliates as at the 2% Loan Completion Date is the same as that as at the Loan Reference Date, is estimated to be RMB158,435,515.71.

LISTING RULES IMPLICATIONS

As one of the applicable percentage ratios calculated under Rule 14.07 of the Listing Rules in respect of the 2% Disposal is more than 5% but less than 25%, the 2% Disposal, on a standalone basis, constitutes a discloseable transaction of the Company. When aggregated with the 49% Disposal, the 2% Disposal constitutes a major transaction of the Company as one of the applicable percentage ratios in respect of the 49% Disposal and the 2% Disposal as calculated on an aggregated

basis under Rule 14.07 of the Listing Rules is above 25% but less than 75%. However, as the Company has complied with the major transaction requirements for the 49% Disposal, it is not required to re-comply with the major transaction requirements for the 2% Disposal (as aggregated with the 49% Disposal). As such, the 2% Disposal is only subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

This announcement is also made by the Company pursuant to Rule 13.09(2) of the Listing Rules and the provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

INTRODUCTION

Reference is made to the 49% Disposal Announcement, the Circular and the Poll Results Announcement.

As disclosed in the Poll Results Announcement, the 49% Disposal and matters in connection therewith have been approved by the Shareholders at the GM held on 11 May 2016.

The Seller, Guangzhou Lianheng and the Purchaser entered into the 2% Equity Transfer Agreement pursuant to which the Seller agreed to sell, and the Purchaser agreed to purchase, 2% of the equity interest in the Project Company for a consideration of RMB94,999,000. Simultaneously, the Loan Assignor, the Purchaser, the Project Company and the Seller entered into the 2% Loan Assignment Agreement pursuant to which the Loan Assignor agreed to assign, and the Purchaser agreed to accept the assignment of, the 2% Loan on a dollar-for-dollar basis. The consideration for the 2% Assignment of Loan shall be the face value of the 2% Loan.

2% EQUITY TRANSFER AGREEMENT

The principal terms of the 2% Equity Transfer Agreement are set out below:

Date

28 May 2016

Parties

The Seller (as seller), the Purchaser (as purchaser) and Guangzhou Lianheng (each a "Party", collectively, "Parties")

To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, as at the date of this announcement, each of the Purchaser, Guangzhou Lianheng, and their respective ultimate beneficial owners is an Independent Third Party.

Asset to be disposed of

Pursuant to the 2% Equity Transfer Agreement, the Seller agreed to sell, and the Purchaser agreed to purchase, 2% of the equity interest in the Project Company. The transaction contemplated under the 2% Equity Transfer Agreement is subject to the approval of Guangzhou Municipal Commission of Commerce.

Consideration and payment terms

The Equity Transfer Consideration shall be payable in full by the Purchaser to the Seller (via an account designated by the Seller) within 10 Business Days after the date of the 2% Equity Transfer Agreement.

Completion of the 2% Equity Transfer

The Purchaser shall arrange for registration of the 2% Equity Transfer with the State Administration for Industry and Commerce of the PRC or its relevant local counterpart. Completion of the 2% Equity Transfer shall take place on such date as the Purchaser and the Seller may agree.

Compensation

The defaulting party shall be required to compensate the non-defaulting party for the loss suffered by the non-defaulting party caused by the defaulting party's breach (as defined in the 2% Equity Transfer Agreement) of the 2% Equity Transfer Agreement.

Termination

The 2% Equity Transfer Agreement may be terminated upon the occurrence of any of the following events:

1. agreement in writing between the Parties;

2. force majeure or if the purpose of the 2% Equity Transfer is unable to be realised; or

3. termination pursuant to any applicable laws, rules and regulations or pursuant to other terms of the 2% Equity Transfer Agreement.

In the event that the Equity Transfer Consideration (or any part thereof) is overdue for more than 30 days, the Seller may terminate the 2% Equity Transfer Agreement. All of the Transaction Documents shall terminate on the date of receipt by the Purchaser of the written notice of termination issued by the Seller. In such event, the Seller shall be entitled to compensation for all losses from the Purchaser.

Management of the Project Company

The Seller, Guangzhou Lianheng and the Purchaser will cooperate to jointly develop the Project through the Project Company, with the Seller being mainly responsible for the overall management of the Project.

Subsequent capital injection and shareholders loans

At the request of the Project Company and subject to the maximum amount of RMB7,200,000,000 (which maximum amount includes the paid-up registered capital of the Project Company of RMB3,598,000,000), the Parties (and/or their respective Affiliates) shall provide shareholders loans ("Subsequent Funding") to the Project Company in proportion to their respective equity interests in the Project Company for the purpose of satisfying its funding needs. As such, following completion of the 2% Disposal, the 2% Loan (which would then be owing from the Project Company to the Purchaser) shall constitute part of the pro-rata Subsequent Funding to be provided by the Purchaser (and/or its Affiliates) while such portion of the amount then owing from the Project Company to the Loan Assignor and its Affiliates (which are also the Seller's Affiliates) that has not been assigned to the Purchaser and Guangzhou Liangheng shall constitute part of the pro-rata Subsequent Funding to be provided by the Seller (and/or its Affiliates).

In the event that the Project Company needs additional funds to satisfy the development, construction or operating costs of the Project that is in excess of the Subsequent Funding contemplated above, the Project Company shall first arrange for external financing. To the extent that the Project Company is unable to obtain such external financing, the Parties shall provide shareholders loans in proportion to their respective equity interests in the Project Company for such amount and in such manner as may be approved by way of a resolution of the directors of the Project Company.