Hong Kong Exchanges and Clearing : DISCLOSEABLE TRANSACTION SHARE SUBSCRIPTION IN BRONZELINK HOLDINGS LIMITED

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.

INTERNATIONAL BUSINESS SETTLEMENT HOLDINGS LIMITED

國 際 商 業 結 算 控 股 有 限 公 司

(Incorporated in Bermuda with limited liability)

(Stock Code: 00147)

DISCLOSEABLE TRANSACTION

SHARE SUBSCRIPTION IN BRONZELINK HOLDINGS LIMITED

Financial Adviser to the Company

THE SUBSCRIPTION

The Board is pleased to announce that, after trading hours on 19 July 2019, the Subscriber (as the subscriber), the Target Company (as the issuer) and Mr. Yiu entered into the Subscription Agreement, pursuant to which the Subscriber has conditionally agreed to subscribe for, and the Target Company has conditionally agreed to allot and issue, the Subscription Shares at the Subscription Price of USD50 million.

LISTING RULES IMPLICATIONS

As the highest of the applicable percentage ratios (as defined under the Listing Rules) in respect of the Subscription is more than 5% but less than 25%, the Subscription constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules. Accordingly, the Subscription is subject to notice and announcement requirements under the Listing Rules.

The Completion is subject to the fulfilment of the conditions precedent as set out in the Subscription Agreement and the Subscription may or may not proceed. Shareholders and potential investors of the Company should therefore exercise caution when dealing in the Shares.

The Board is pleased to announce that, after trading hours on 19 July 2019, the Subscriber (as the subscriber), the Target Company (as the issuer) and Mr. Yiu entered into the Subscription Agreement, pursuant to which the Subscriber has conditionally agreed to subscribe for, and the Target Company has conditionally agreed to allot and issue, the Subscription Shares at the Subscription Price of USD50 million.

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THE SUBSCRIPTION AGREEMENT

Date

19 July 2019

Parties

1. The Subscriber, as the subscriber;
2. the Target Company, as the issuer; and
3. Mr. Yiu, the ultimate beneficial shareholder of the Target Company as at the date of this announcement.

To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, Mr. Yiu and the Target Company are Independent Third Parties.

Subscription Shares

The 5 Subscription Shares represent (i) approximately 5.56% of the issued share capital of the Target Company; and (ii) approximately 5.26% of the issued share capital of the Target Company as enlarged by the allotment and issue of the Subscription Shares (assuming that there is no change in the issued share capital of the Target Company from the date of this announcement to the Completion).

Subscription Price

The Subscription Price of USD50 million will be funded by the internal resources of the Group. The Subscriber shall deliver the Escrow Document to an escrow agent within ten Business Days after signing of the Subscription Agreement, pending for the date of Completion (conditional upon the fulfilment and/ or waiver (as the case may be) of the conditions precedent pursuant to the Subscription Agreement as set out below) as payment for the Subscription.

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The Subscription Price was determined by the Subscriber and the Target Company after arm's length negotiations taking into account of (i) a previous investment made by an Independent Third Party (and also independent to the Target Group and its beneficial owner at the time the investment was made) on similar basis in April 2019 (as at the date of this announcement, the investment is in pending for completion); (ii) undertaking by the Target Company to all potential investors in the Target Company that any further fundraising of the Target Company shall be conducted at a valuation of the Target Company of not less than USD1.05 billion (please refer to the sub-section headed "Pre-emptive rights" in this announcement); (iii) the potential upside of the Subscription Shares in respect of the future business development of the Target Company upon the commencement of operations of the Satellite; and (iv) the potential economic benefits of the exclusive right to be granted to the Group to sell certain bandwidth of the Satellite. The Board considers that the terms of the Subscription Agreement are on normal commercial terms and are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Conditions Precedent

The Completion is conditional upon satisfaction of the following:

1. Global IP having renewed the Boeing Agreement with Boeing and having provided the Subscriber with a new timetable of production issued by Boeing;
2. the due diligence conducted on the Target Company having been completed by the Subscriber and the Subscriber being satisfied with the results of the due diligence process;
3. all other requisite consents, authorisations, and approvals (or as the case may be, relevant waiver) in connection with the entering into and performance of the terms of the Subscription Agreement having been obtained by the respective parties to the Subscription Agreement; and
4. none of the warranties made by the Target Company and Mr. Yiu under the Subscription Agreement and other provisions of the Subscription Agreement having been breached in any material respect (or, if capable of being remedied, has not been remedied within the period set by the Subscriber) or (in respect of any of the aforementioned warranties) is misleading or untrue in any material respect.

The above conditions (save for conditions (a) and (c) which cannot be waived) can be waived by the Subscriber at any time by notice in writing to the Target Company. If the above conditions are not fulfilled and/or waived (as the case may be) by the Long Stop Date, or such later date as may be agreed in writing between the parties of the Subscription Agreement, the Subscriber, the Target Company and Mr. Yiu shall be automatically be released from all obligations under the Subscription Agreement, save and except any liability for antecedent breaches.

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Undertakings

1. Mr. Yiu undertakes to the Subscriber that, among other matters, prior to the Completion and so far as it is reasonably able, the business of the Target Company will be carried on in the ordinary course and that no information concerning the Target Company or its business shall be disclosed to third party other than in the ordinary course of business;
2. upon Completion, the Target Company shall not issue any shares, options, warrants or other securities convertible into any shares of the Target Company of any type or class to any person unless the Target Company has obtained the prior written consent of the Subscriber and that Mr. Yiu and the Target Company shall procure that the Subscriber shall still hold not less than 5% of the entire issued share capital of the Target Company regardless of any new issue of the shares, options, warrants or other securities convertible into the shares of the Target Company of any type or class; and
3. after the Completion, the Target Company shall also procure granting an exclusive right to the Subscriber to sell or to sub-license not less than 50Gbps bandwidth which is around 1/3 of the total bandwidth available from the Satellite to the Subscriber and, in connection with such sale or sub- license, entitle the Subscriber to a payment in the amount of not less than 5% of the gross selling price payable by each of the customers of such 50Gbps bandwidth.

Completion

The Completion shall take place on the third Business Day (or within three Business Days as agreed by Mr. Yiu and the Subscriber) following the date that all the conditions precedent as set out in the Subscription Agreement having been satisfied and/or waived (as the case may be) and the financial results of the Target Company shall not be consolidated with the Group.

In the event of the termination of the Subscription Agreement, the Subscriber shall, within two Business Days upon termination of the Subscription Agreement, instruct the return of the Escrow Document to the Subscriber immediately.

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Shareholders' Agreement

Upon Completion, the then shareholders of the Target Company will enter into the Shareholders' Agreement to provide for, among other matters, transferral rights and certain other rights and obligations of the shareholders of the Target Company.

The summary of the principal terms of the Shareholders' Agreement are as follows:

Transfer of shares of the Target Company

Subject to other terms contained in the Shareholders' Agreement, no shareholder may transfer any of the shares in the Target Company (or any interest therein), unless with the prior written consent of the other shareholders, or permitted or required to do so pursuant to the terms of the Shareholders' Agreement.

When any shareholder intends to sell or transfer all or any of its shares in the Target Company (or any interest therein) to a third party (the "Transferring Shareholder"), the other shareholders may, in writing within one calendar month from the date of the notice of transfer (i) by giving a notice of purchase to the Transferring Shareholder to require the Transferring Shareholder to sell to him/her/it such number of the shares, as the case may be (as specified in the notice of transfer and where applicable) for the same consideration and on the same terms as those offered by the intended transferee; and (ii) by giving a notice of tag-along to the Transferring Shareholder to include his/her/its shares in the Target Company in the number of shares intended to be sold by the Transferring Shareholder to the intended transferee for the same consideration and on the same terms as those offered by the intended transferee.

Pre-emptive rights

Subject to other terms contained in the Shareholders' Agreement, the Target Company shall not issue any shares, options, warrants or other securities convertible into shares of the Target Company of any type or class to any person unless it has (i) obtained the prior written consent of the Subscriber; and (ii) first offered to its shareholders the right to purchase on a pro rata basis. Moreover, any issue of shares, options, warrants or other securities or rights convertible into shares of the Target Company shall always be made on normal commercial terms taking into account the bona fide interests of the shareholders of the Target Company and with the subscription price determined based on a valuation of the Target Company of not less than USD1.05 billion (unless otherwise agreed in writing by all the shareholders of the Target Company).

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