Yuexiu Property : DISCLOSEABLE TRANSACTION IN RELATION TO THE PROPOSED ACQUISITION OF 50% EQUITY INTEREST IN ZHOUSHAN XIN DE BUSINESS DEVELOPMENT CO., LTD (in PDF)

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)

The Company announces that on 23 October 2016, the Seller, the Purchaser, the Target Company and the Project Company entered into the Equity Transfer Agreement pursuant to which, among other things, the Seller agreed to sell, and the Purchaser agreed to purchase, the Target Interest, for a consideration of RMB1,733,080,050.

The main objective of the Transaction is for the Purchaser and the Seller to jointly develop the Project. The Project to be constructed on the Undeveloped Land Parcel will be a mixed-use complex with a total permitted gross floor area of 693,055 sq.m, of which 605,869 sq.m will comprise residential properties, and 87,186 sq.m will comprise commercial properties.

As one of the applicable percentage ratios exceeds 5% but is lower than 25%, the acquisition constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules.

The Company announces that on 23 October 2016, the Seller, the Purchaser, the Target Company and the Project Company entered into the Equity Transfer Agreement pursuant to which, among other things, the Seller agreed to sell, and the Purchaser agreed to purchase, the Target Interest, for a consideration of RMB1,733,080,050.

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

23 October 2016

The Seller (as seller), the Purchaser (as purchaser), the Target Company and the Project Company (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, the Seller, the Target Company and the Project Company, and their respective ultimate beneficial owners are Independent Third Parties.

Pursuant to the Equity Transfer Agreement, the Seller agreed to sell, and the Purchaser agreed to purchase, 50% of the equity interest in the Target Company, which corresponds to 50% interest in the Undeveloped Land Parcel only (the "Target Interest"), and specifically excludes the Developed Land Parcel and all interests, benefits and liabilities derived therefrom, which does not form part of the Transaction.

The Consideration of RMB1,733,080,050 shall be paid by the Purchaser to the Seller in the following manner:

1. the Initial Purchase Price shall be paid within five Business Days after (a) the effective date of the Equity Transfer Agreement and (b) the Purchaser having completed the withholding and payment of the enterprise income tax arising from this Transaction. Prior to the date of the Equity Transfer Agreement, the earnest money in the amount of RMB100,000,000 (the "Earnest Money") has been paid to a bank account jointly controlled by Hangzhou Yan Sheng and the Seller. Such Earnest Money shall be applied to settle part of the Initial Purchase Price; and

2. the Balance shall be paid within 10 Business Days after the Conditions Precedent have been fulfilled and/or waived.

In addition, within five Business Days after the SAIC Registration Date, the Purchaser shall provide financing to Taicang He Rong in the amount of RMB691,919,950, which will be used to repay 50% of the RMB950,010,100 debt owed by Taicang He Rong (the "Taicang He Rong Debt"), and 50% of the Specified Debts. Within 15 Business Days after Taicang He Rong receives such financing from the Purchaser, the Seller or its affiliate shall: (i) settle all loans secured by the State-owned Land Use Rights Certificates in relation to the Land Parcel and all loans which are not owed by the Project Company but for which the Project Company has provided guarantee; and (ii) complete the release of such security/guarantee.

After the SAIC Registration Date, the Purchaser may perform audit on the financial information of the Target Group Companies as at the SAIC Registration Date. In the event that there are any shortfall between the financial conditions of the Target Group Companies according to such audit and those as shown on the financial statements of the Target Group Companies provided by the Seller, the Purchaser may deduct the amount of such shortfall from the unpaid part of the Consideration.

The Consideration was determined after arm's length negotiations among the Parties with reference to the fair value of the Target Interest as at 30 September 2016 as valued by the Independent Valuer.

According to the valuation by the Independent Valuer, the fair value of the Target Interest as at 30 September 2016 after taking into account the appraised value of the Undeveloped Land Parcel as at 30 September 2016 was approximately RMB1,772,000,000.

The Consideration represents a discount of approximately 2.2% over the fair value of the Target Interest as at 30 September 2016 as valued by the Independent Valuer.

Completion of the Transaction is conditional upon the satisfaction or waiver of the following Conditions Precedent:

1. the representations and warranties made by the Seller in the Transaction Documents remaining true, accurate, complete and not misleading from the date of the Equity Transfer Agreement up to and including the date of Completion;

2. the Transaction Documents having been signed, and any subsequent amendments thereto (if any) requested by the Ministry of Commerce of the PRC and/or SAIC having been approved by the Parties;

3. the Transaction having been approved (if required) by or recorded with the relevant business administration authorities having jurisdiction;

4. the Purchaser having been registered and shown in the relevant PRC authority as the registered holder of 50% of the equity interest in the Target Company, and the Target Company having completed the foreign exchange registration procedures in relation to the Transaction;

5. settle all loans secured by the State-owned Land Use Rights Certificates in relation to the Land Parcel and all loans which are not owed by the Project Company but in respect of which the Project Company has provided guarantee, and complete the release of all such security/guarantee;

6. the appointment of directors and other personnel of each of the Target Group Companies nominated by the Purchaser having become effective;

7. the respective new articles of association of the Target Company Subsidiaries having become effective and the registration of such articles of associations with the relevant PRC authorities having been completed;

8. there being no material adverse change in respect of the Target Group Companies;

9. all pre-Completion covenants having been fulfilled or not having been breached;

10. the Project Company having entered into a termination or supplemental agreement with Hangzhou Chang Chun to the effect that the Project Company may early terminate the Seedlings Cultivation Land Lease without any liabilities;

11. Taicang He Rong having received written confirmation from Zhejiang He Rong confirming that 50% of the Taicang He Rong Debt have been settled, that there is no outstanding debt between Taicang He Rong and Zhejiang He Rong other than the remaining 50% of the Taicang He Rong Debt, and that there is no other outstanding matter between Taicang He Rong and Zhejiang He Rong; and

12. Taicang He Rong having received written confirmations from the respective creditors of the Specified Debts confirming that 50% of the Specified Debts have been settled, that there is no outstanding debt between Taicang He Rong and such creditors other than the remaining 50% of the Specified Debts, and that there is no other outstanding matter between Taicang He Rong and such creditors.

The Seller shall use its reasonable endeavours to: (a) fulfil the Conditions Precedent listed at (ii), (iii), (iv), (vi), and (vii) above within 15 Business Days after the Initial