Applied Development : Announcement of Major Transaction Disposal of Shares in Redsun Properties

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 Bermuda with limited liability)

(Stock Code: 519)

MAJOR TRANSACTION

DISPOSAL OF SHARES IN REDSUN PROPERTIES

DISPOSAL OF SHARES IN REDSUN PROPERTIES

Reference is made to the announcement of the Company dated 28 June 2018 in relation to subscription of the Redsun Properties Shares and the announcement of the Company dated 26 July 2019 in relation to the Prior Disposal.

The Board announces that on 15 August 2019 (after trading hours), Dragon Bell (a wholly- owned subsidiary of the Company) entered into the Sales and Purchase Agreement with the Purchaser in relation to the disposal of the Sale Shares. Pursuant to the Sales and Purchase Agreement, the selling price per Sale Share will be determined by the Parties on the Completion Date and shall be within the Price Range. For illustrative purpose, the maximum Consideration will be HK$101,750,000 assuming the selling price per Sale Share is determined at the high end of the Price Range.

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LISTING RULES IMPLICATIONS

As the Prior Disposal and the Disposal are entered into with the same Purchaser and both involve the disposal of Redsun Properties Shares, which form a series of transactions conducted within a 12-month period, the Disposal is required to be aggregated with the Prior Disposal for the purpose of computing the relevant percentage ratios pursuant to Rule

14.22 of the Listing Rules. Assuming that the Sale Share are disposed at the maximum price within the Price Range, the highest applicable percentage ratio under the Listing Rules in respect of the Disposal (on its own and after aggregation with the Prior Disposal) is more than 25% but be less than 75%. Therefore, the Disposal constitutes a major transaction of the Company under Chapter 14 of the Listing Rules and is subject to announcement, circular and shareholders' approval requirements under Chapter 14 of the Listing Rules.

GENERAL

The EGM will be convened for the purposes of considering and, if thought fit, passing the necessary resolution(s) to approve, among other matters, the Sales and Purchase Agreement and the transactions contemplated thereunder.

A circular containing, among other things, (i) further information relating to the Disposal of the Sale Shares; (ii) a notice convening the EGM; and (iii) other information as required to be disclosed under the Listing Rules, is expected to be despatched to the Shareholders on or before 5 September 2019.

Shareholders and potential investors of the Company should note that Completion is subject to the fulfillment or waiver (as the case may be) of the conditions precedent set out in the Sales and Purchase Agreement and therefore may or may not occur. Shareholders and potential investors of the Company are reminded to exercise caution when dealing with the Shares and other securities of the Company.

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Reference is made to the announcement of the Company dated 28 June 2018 in relation to subscription of Redsun Properties Shares and the announcement of the Company dated 26 July 2019 in relation to the Prior Disposal.

The Board announces that on 15 August 2019 (after trading hours), Dragon Bell (a wholly- owned subsidiary of the Company) entered into the Sales and Purchase Agreement with the Purchaser in relation to the disposal of the Sale Shares, the principal terms of which are set out as follows:

THE SALES AND PURCHASE AGREEMENT

Date:	15 August 2019
Parties:	(1)	Dragon Bell (as vendor); and
	(2)	the Purchaser (as purchaser)

Assets to be disposed of

The Sale Shares, comprising 37,000,000 Redsun Properties Shares, represent approximately 1.11% of the total issued share capital of Redsun Properties (based on the total issued shares of 3,320,000,000 as at 31 July 2019 according to the monthly return of Redsun Properties dated 5 August 2019). Following the Disposal, the Group will hold 76,078,000 Redsun Properties Shares, representing approximately 2.29% of the total issued share capital of Redsun Properties. Dragon Bell originally subscribed for 131,578,000 Redsun Properties Shares at the total subscription price of HK$299,997,840 or HK$2.28 per Redsun Properties Share on 12 July 2018.

Consideration

Pursuant to the Sales and Purchase Agreement, the selling price per Sale Share will be determined by the Parties on the Completion Date and shall be within the Price Range. The Price Range was arrived at after arm's length negotiations between Dragon Bell and the Purchaser taking into consideration of the recent trading prices of Redsun Properties Shares.

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The maximum price of HK$2.75 within the Price Range represents:

1. a premium of approximately 12.7% over the closing price of HK$2.44 per Redsun Properties Shares on 14 August 2019, being the last trading day of the Redsun Properties Shares prior to the date of the Sales and Purchase Agreement;
2. a premium of approximately 14.1% over the average closing price of approximately HK$2.41 per Redsun Properties Shares for the five trading days immediately prior to the date of the Sales and Purchase Agreement; and
3. a premium of approximately 8.5% over the average closing price of approximately HK$2.535 per Redsun Properties Shares for the 30 trading days immediately prior to the date of the Sales and Purchase Agreement.

The minimum price of HK$2.30 within the Price Range represents:

1. a discount of approximately 5.7% over the closing price of HK$2.44 per Redsun Properties Shares on 14 August 2019, being the last trading day of the Redsun Properties Shares prior to the date of the Sales and Purchase Agreement;
2. a discount of approximately 4.6% over the average closing price of approximately HK$2.41 per Redsun Properties Shares for the five trading days immediately prior to the date of the Sales and Purchase Agreement; and
3. a discount of approximately 9.27% over the average closing price of approximately HK$2.535 per Redsun Properties Shares for the 30 trading days immediately prior to the date of the Sales and Purchase Agreement.

For illustrative purpose, the maximum Consideration will be HK$101,750,000 assuming the selling price per Sale Share is determined at the high end of the Price Range.

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The Price Range provides flexibility for the Parties to accommodate change in market condition and ensure that the Company can dispose the Sale Shares at an acceptable price, which is higher than its subscription cost.

Conditions Precedent

The obligations of the Purchaser to proceed to the Completion is conditional upon the fulfillment or waiver (if applicable) by the Purchase of the following conditions:

1. representations and warranties given by Dragon Bell under the Sales and Purchase Agreement being true, correct and not misleading when made and remaining true, correct and not misleading as at the Completion Date; and
2. Dragon Bell having published the relevant announcement and/or circular (if necessary) and having obtained the approval (if necessary) in relation to the Sales and Purchase Agreement and the transactions contemplated therein from the Shareholders pursuant to the relevant requirements under the Listing Rules and the requirements of the Stock Exchange.

The obligations of Dragon Bell to proceed to the Completion is conditional upon the fulfillment or waiver by Dragon Bell of the following condition:

1. representations and warranties given by the Purchaser under the Sales and Purchase Agreement being true, correct and not misleading when made and remaining true, correct and not misleading as at the Completion Date.

Completion

Completion of the Sales and Purchase Agreement shall take place within fifteen Business Days following the satisfaction or waiver (if applicable) of the conditions precedent to the Sales and Purchase Agreement or such other date as mutually agreed by the Parties, but in any event the Completion shall take place no later than 31 October 2019.

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