SMI Culture & Travel : Announcements and Notices - Voluntary Announcement in Relation to Possible Acquisition

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.

This announcement is for information purpose only and does not constitute any invitation or offer to acquire, purchase or subscribe for any securities of the Company.

SMI Culture & Travel Group Holdings Limited ݋ߕ˖ʷ༷ࣚණྠછٰϞࠢʮ̡

(Incorporated in the Cayman Islands and continued in Bermuda with limited liability)

(Stock code: 2366)

VOLUNTARY ANNOUNCEMENT

IN RELATION TO POSSIBLE ACQUISITION

The announcement is made by the Company on a voluntary basis, for the purpose of informing the shareholders and potential investors of the business updates of the Group.

The Board is pleased to announce that on 16 May 2018, the Company and the Sellers (independent third parties) entered into the MOU pursuant to which, the Company and the Sellers agree to conduct bona fide negotiations within 45 days from the date of the MOU with a view to enter into the Formal Agreement in relation to the Possible Acquisition.

According to the MOU, the Company (on its own or through its subsidiary) proposes to acquire and the Sellers propose to sell all issued shares of the Three Target Companies, the completion of which will be subject to the fulfilment or waiver of certain Conditions Precedent, including (among others) (i) the Company and the Sellers sign and deliver the Formal Agreement; (ii) the Company is satisfied with the results of due diligence of the business, financial and legal aspects of the Three Target Companies; (iii) the Company, the Sellers and the Three Target Companies have obtained all necessary consents, permits and approvals in relation to the Possible Acquisition; (iv) the Company has complied with all the requirements of the Listing Rules and/ or the Code on Takeovers and Mergers in relation to the Possible Acquisition; and (v) other conditions set out in the Formal Agreement.

The consideration for the Possible Acquisition is preliminarily agreed at HK$500,000,000, of which approximately HK$300,000,000 will be paid by way of issuance of consideration shares of the Company, approximately HK$100,000,000 will be paid by way of issuance of debt of the Company while the remaining approximately HK$100,000,000 will be paid by the Company in cash. The consideration and method of payment thereof will be determined subject to further negotiations and set out in the Formal Agreement.

Pursuant to the MOU, the Company shall pay the Sellers a refundable deposit of HK$10,000,000 on the date of the MOU. Such deposit will be refunded to the Company if the parties fail to enter into the Formal Agreement within 45 days from the date of the MOU or upon termination of the MOU.

The Three Target Companies are principally engaged in film and television production and distribution related businesses. The Group is principally engaged in the investment in the production and distribution of films; investment in the production and distribution of television (TV) dramas and creation; production and distribution of new media contents, production and distribution of online and film advertisements, agency operation for films, directors, scriptwriters and artists, and tourism. It is the Group's long-term mission to explore suitable acquisition opportunities.

The Directors are of the view that, the Possible Acquisition will enhance the film and television production and distribution businesses of the Group and expand the Group's business portfolio and is thus in the interest of the Company and its shareholders as a whole.

Except for certain provisions relating to confidentiality, fees and expenses and governing law, etc., the MOU is not legally binding and the Possible Acquisition may or may not proceed.

Pursuant to Chapter 14 of the Listing Rules, once the Formal Agreement is entered into, the Possible Acquisition will constitute a disclosable transaction of the Company. In the event that (i) the Company (or its subsidiary) enters into the Formal Agreement; (ii) the Company decides not to conduct the transactions contemplated under the MOU; or (iii) there is any significant progress in relation to the Possible Acquisition, the Company will inform its shareholders and investors as and when appropriate in accordance with the Listing Rules.

DEFINITIONS

"Board"	the board of Directors
"Company"	SMI Culture & Travel Group Holdings Limited, a company
incorporated in the Cayman Islands and continued in Bermuda
with limited liability, the shares of which are listed on the Main
Board of the Stock Exchange
"Conditions Precedent"	the conditions precedent for completion of the Possible Acquisition
"Directors"	the directors of the Company
"Group"	the Company and its subsidiaries
"Hong Kong"	the Hong Kong Special Administrative Region of the People's
Republic of China
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock Exchange
"Possible Acquisition"	the possible acquisition pursuant to which the Group shall acquire
all issued shares of the Three Target Companies from the Sellers
"Sellers"	the shareholders of the Three Target Companies, together holding
100% of the issued share capital of each of the Three Target
Companies
-2-

"Share(s)"	ordinary share(s) of HK$0.01 each in the issued share capital of
the Company
"Shareholder(s)"	holder(s) of Shares
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Three Target Companies"	Mega-Vision Project Distribution Limited, Mega-Vision Project
Production Limited and Mega-Vision Project Workshop Limited,
all incorporated in Hong Kong.
"%"	per cent
Hong Kong, 16 May 2018

By order of the Board

SMI Culture & Travel Group Holdings Limited

Yao Qinyi

Executive Director

As at the date of this announcement, the executive Directors are Mr. WU Chien-Chiang (Chairman), Ms. YAO Qinyi and Mr. LI Kai; and the independent non-executive Directors are Mr. RAO Yong, Mr. LIU Xianbo and Mr. ZHAO Xuebo.