RCG : Major Transaction Proposed Disposal of Property

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.

宏霸數碼集團（控股）有限公司 *

(a company incorporated in Bermuda with limited liability)

(Stock Codes: HKSE: 802; AIM: RCG)

The Board of the Company is pleased to announce that, the Vendor, an indirect wholly- owned subsidiary of the Company, entered into the Agreement with the Purchaser, an Independent Third Party on 15 April 2014 after trading hours, pursuant to which, the Vendor has conditionally agreed to sell and the Purchaser has conditionally agreed to purchase the Property at a total Consideration of RM59.80 million (approximately HK$142.72 million and approximately £11.03 million).
As certain applicable percentage ratios (as defined in the Hong Kong Listing Rules) for the Disposal exceeds 25% but is less than 75%, the Disposal constitutes a major transaction for the Company under Chapter 14 of the Hong Kong Listing Rules and is subject to the reporting, announcement and Shareholders‟ approval requirements under the Hong Kong Listing Rules.
A circular containing, further details of the Disposal and a notice convening a special general meeting of the Company for the purpose of seeking Shareholders‟ approval of the Disposal, is expected to be dispatched to the Shareholders on or before 12 May 2014.

The Board of the Company is pleased to announce that, the Vendor, an indirect wholly- owned subsidiary of the Company, entered into the Agreement with the Purchaser, an Independent Third Party on 15 April 2014 after trading hours, pursuant to which, the Vendor has conditionally agreed to sell and the Purchaser has conditionally agreed to purchase the Property at a total Consideration of RM59.80 million (approximately HK$142.72 million and approximately £11.03 million) subject, inter alia, to the approval of shareholders of both the Company and the Purchaser.

*For purpose of identification only

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15 April 2014

(1) Vendor: RCG Land Sdn. Bhd.
(2) Purchaser: Pertubuhan Peladang Kebangsaan (National Farmers Organisation)

The Consideration for the Disposal in the total amount of RM59.80 million (approximately HK$142.72 million and approximately £11.03 million) shall be paid by the Purchaser in the following manner:-
(a) a sum of RM5.98 million (approximately HK$14.27 million and approximately £1.10 million) shall be paid upon execution of the Agreement.
(b) the balance sum of RM53.82 million (approximately HK$128.45 million and approximately £9.93 million) being the balance of the total Consideration shall be paid within three months from the completion of the Disposal.

The Consideration has been arrived at after arm‟s length negotiations between the Vendor and the Purchaser and was determined with reference to the market price of other similar lands and premises in the vicinity of the Property. Based on the valuation report dated 10 March 2014 (for accounting reference purpose) prepared by JS Valuers Property Consultants Sdn. Bhd., the

market value of the Property as at 31 December 2013 was RM59.80 million (approximately
HK$142.72 million and approximately £11.03 million).

Completion of the Disposal is subject to:-
(i) the written consent of the state authority for the transfer of all the Vendor‟s rights and entitlements to the Purchaser;
(ii) obtaining the approval for the Disposal from the Shareholders in general meeting; and

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(iii) obtaining the approval for the acquisition from the shareholders of the Purchaser in general meeting.

The Company is an investment holding company and the Group is principally engaged in the developing, sourcing and selling biometric and radio frequency identification (RFID) products and solutions services in the Asia Pacific region. The Group‟s business is

divided generally into four categories; "Trading of Security of Biometrics Products",

"Solutions, Projects and Services", "Internet and Mobile Applications & Related

Accessories" and "Commodities Trading".

Pertubuhan Peladang Kebangsaan (National Farmers Organisation) is a body corporate incorporated in Malaysia under the Farmer‟s Organisation Act, 1973 (ACT 109), been involved in various business activities and investment, particularly in agriculture.
To the best of the Directors‟ knowledge, information and belief and having made all reasonable enquiries, the Purchaser is an Independent Third Party.

Premised on the revitalizing property market condition in the region in particular Malaysia, the Board considers that the Disposal is a good avenue for the Company to unlock the value in the Property. The proceeds from the Disposal will enable the Company to repay its mortgages and to be used by the Group for general working capital or considerations for investment opportunities.
The Board (including independent non-executive Directors) considers that the Agreement was entered into after arm‟s length negotiation between the Company and the Purchaser and the terms therein are in accordance with the normal practice in the property market and the Disposal is fair and reasonable and in the interest of the Company and the Shareholders as a whole.

Considering the carrying amount of approximately RM51.70 million (approximately HK$123.39 million and approximately £9.54 million) as at 31 December 2013 of the Property, upon completion of the Disposal, would result in a loss in approximately RM3.79 million (approximately HK$9.04 million and approximately £0.70 million) after tax and expenses is expected to accrue to the Group. This is inclusive of various direct costs attributable to the Disposal in particular, the reinstatement and repair works, facilitator fees and property agent fees.
The finance costs are expected to reduce by approximately RM6.00 million (approximately HK$14.32 million and approximately £1.11 million) per annum after repayment of the bank borrowing attributable to the Property .

The proceeds from the Disposal will enable the Company to repay mortgages outstanding in respect of the Property totaling approximately RM15.36 million (approximately HK$36.66 million and approximately £2.83 million). The balance of the proceeds from the Disposal will be used for the Group‟s general working capital purposes and as consideration for any investment opportunities.

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As certain applicable percentage ratios (as defined in the Hong Kong Listing Rules) for the Disposal exceeds 25% but is less than 75%, the Disposal constitutes a major transaction for the Company under Chapter 14 of the Hong Kong Listing Rules and is subject to the reporting, announcement and Shareholders‟ approval requirements under the Hong Kong Listing Rules.
A circular containing, among other information, further details of the Disposal is expected to be dispatched to the Shareholders on or before 12 May 2014.

Notes:

(i) HK$ equivalent values above are based on an exchange rate of RM0.419/HK$1. (ii) Sterling equivalent values above are based on an exchange rate of RM5.420/£1.

In this announcement, unless the context otherwise requires, the following expressions shall have the following meaning:

""Agreement‟‟ the sale and purchase agreement dated 15 April 2014 entered into between the Vendor and the Purchaser in respect of the Disposal;

""AIM‟‟ a stock market operated by the LSE;

""Board‟‟ the board of Directors;

""Company‟‟ RCG Holdings Limited (AIM: RCG, HKSE: 802), a company incorporated in Bermuda with limited liability and the shares of which are listed on The Stock Exchange of Hong Kong Limited and admitted to trading on AIM and are traded on

the ISDX secondary market;

""Consideration‟‟ the consideration payable by the Purchaser to the Vendor for the

Disposal pursuant to the Agreement;

""Director(s)‟‟ the director(s) of the Company;

""Disposal‟‟ the disposal of the Property by the Vendor to the Purchaser pursuant to the Agreement;

""Group‟‟ the Company and its subsidiaries;

""HKSE‟‟ The Stock Exchange of Hong Kong Limited;

""HK$‟‟ Hong Kong dollars, the lawful currency of Hong Kong;

""Hong Kong

Listing Rules"
the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited;

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"Independent Third

Party"

person or company and their respective ultimate beneficial owner which, to the best of the Directors‟ knowledge, information and belief, having made all reasonable enquiries, are third parties independent of and not connected with the Company and its connected persons;

""ISDX"

""LSE"

"Pounds" or "£"

ICAP Securities & Derivatives Exchange Limited, a recognized Investment Exchange under the Financial Services and Markets Act 2000 (formerly PLUS Stock Exchange/PLUS-SX);
The London Stock Exchange plc;
Pounds sterling, the lawful currency of the UK;

"Property" an industrial premises comprising a three storey detached factory building with an annexed three storey office building and a guard house with total build-up area of 204,067 square feet erected on that piece of land having an area of 1.3581 hectares;

""Purchaser" Pertubuhan Peladang Kebangsaan (National Farmers Organisation), a body corporate incorporated in Malaysia under the Farmer‟s Organisation Act, 1973 (ACT 109);

"RM" Ringgit Malaysia, the lawful currency in Malaysia;

"Shareholders" the shareholder(s) of the Company;

""Vendor‟‟ RCG Land Sdn. Bhd., a private company incorporated in Malaysia, is an indirect wholly-owned subsidiary of the Company; and

""%‟‟ per cent.

Hong Kong, 15 April 2014
By Order of the Board of RCG Holdings Limited Li Jinglong

Director

As at the date of this announcement, the Board comprises the following Directors:

Executive Directors:

Li Jinglong Zhang Ligong Wang Zhongling

Independent Non-executive Directors:

Liu Wen
Kwan King Wah
Zeng Min

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