Asia Orient : Major Transaction in relation to the Exchange of Kaisa Notes

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this joint 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 joint announcement.

ASIA ORIENT HOLDINGS	ASIA STANDARD INTERNATIONAL	ASIA STANDARD HOTEL
LIMITED	GROUP LIMITED	GROUP LIMITED
滙漢控股有限公司*	泛海國際集團有限公司*	泛海酒店集團有限公司*
(Incorporated in Bermuda	(Incorporated in Bermuda	(Incorporated in Bermuda
with limited liability)	with limited liability)	with limited liability)
(Stock Code: 214)	(Stock Code: 129)	(Stock Code: 292)
MAJOR	VOLUNTARY	MAJOR
TRANSACTION	ANNOUNCEMENT	TRANSACTION

IN RELATION TO

THE EXCHANGE OF KAISA NOTES

THE EXCHANGE OF KAISA NOTES

On 11 May 2021, AO Noteholder, ASI Noteholder and ASH Noteholder exchanged their respective 9.375% Kaisa Notes in the notional amount of approximately US$4.4 million (equivalent to approximately HK$34.2 million), US$10.2 million (equivalent to approximately HK$79.2 million) and approximately US$10.2 million (equivalent to approximately HK$79.2 million) respectively for the New Kaisa Notes in the same notional amount.

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios in respect of the Exchange of Kaisa Notes, when aggregated with the Previous Disposals, exceeds 25% but is or are less than 75% for each of AO and ASH, the Exchange of Kaisa Notes constitutes a major transaction for each of AO and ASH, and is therefore subject to the reporting, announcement, circular and shareholders' approval requirements under Chapter 14 of the Listing Rules.

As all of the applicable percentage ratios in respect of the Exchange of Kaisa Notes, when aggregated with the Previous Disposals, are below 5% for ASI, the Exchange of Kaisa Notes does not constitute a notifiable transaction for ASI under Chapter 14 of the Listing Rules.

As all of the applicable percentage ratios in respect of the Exchange of Kaisa Notes, when aggregated with the Previous Disposals and any other previous disposals over the past 12 months of the notes issued by Kaisa by AO Group, ASI Group and ASH Group, wo uld still be classified as a major disposal transaction for each of AO, ASI and ASH under Chapter 14 of the Listing Rules, and since each of AO, ASI and ASH has complied with the major disposal transaction requirements in respect of the Major Transaction as set out in 18 December 2020

1

Announcement, 16 December 2020 Announcement, 29 January 2021 Circulars and 5 May 2021 Announcement, each of AO, ASI and ASH is not required to reclassify the Exchange of Kaisa Notes and the Previous Disposals by aggregating them with any other previous disposals over the past 12 months of the notes issued by Kaisa by AO Group, ASI Group and ASH Group, and the implications of the applicable percentage ratios in respect of the Exchange of Kaisa Notes, when aggregated with the Previous Disposals are determined on a standalone basis.

Given that none of the AO Shareholders have a material interest in the Exchange of Kaisa Notes, none of them would be required to abstain from voting if a general meeting of AO were to be convened to approve the Exchange of Kaisa Notes. Pursuant to Rule 14.44 of the Listi ng Rules, AO had obtained a written approval from the AO Closely Allied Group (which together hold approximately 61.20% of the issued share capital of AO as at the date of this joint announcement) to approve the Exchange of Kaisa Notes. Therefore, no general meeting of AO will be convened to approve the Exchange of Kaisa Notes.

Given that none of the ASH Shareholders have a material interest in the Exchange of Kaisa Notes, none of them would be required to abstain from voting if a general meeting of ASH were to be convened to approve the Exchange of Kaisa Notes. Pursuant to Rule 14.44 of the Listing Rules, ASH had obtained a written approval from The Sai Group (which holds approximately 64.35% of the issued share capital of ASH as at the date of this joint announcement) to approve the Exchange of Kaisa Notes. Therefore, no general meeting of ASH will be convened to approve the Exchange of Kaisa Notes.

DESPATCH OF CIRCULAR

A circular containing further information on the Exchange of Kaisa Notes will be des patched to the AO Shareholders and ASH Shareholders respectively as soon as practicable, which is expected to be on or before 7 June 2021.

THE EXCHANGE OF KAISA NOTES

On 11 May 2021, AO Noteholder, ASI Noteholder and ASH Noteholder exchanged their respective 9.375% Kaisa Notes in the notional amount of approximately US$4.4 million (equivalent to approximately HK$34.2 million), US$10.2 million (equivalent to approximately HK$79.2 million) and approximately US$10.2 million (equivalent to approximately HK$79.2 million) respectively for the New Kaisa Notes in the same notional amount.

Given that AO Noteholder, ASI Noteholder and ASH Noteholder used their respective 9.375% Kaisa Notes to exchange for the New Kaisa Notes in the same notional amounts, no cash consideration was paid by them under the Exchange of Kaisa Notes.

INFORMATION ON THE NEW KAISA NOTES

The principal terms of the New Kaisa Notes are summarised as follows:

Interest rate, interest	: The New Kaisa Notes will bear interest from and including 11
payment dates and	May 2021 at the rate of 11.7% per annum, payable semi-
maturity date	annually in arrears on 11 May and 11 November each year,
	commencing on 11 November 2021. The New Kaisa Notes will
	mature on 11 November 2025.
	2

Ranking	: The New Kaisa Notes will be (i) general obligations of Kaisa; (ii)
	senior in right of payment to any existing and future obligations of
	Kaisa expressly subordinated in right of payment to the New Kaisa
	Notes; (iii) at least pari passu in right of payment with all other
	unsecured, unsubordinated indebtedness of Kaisa (subject to any
	priority rights of such unsubordinated indebtedness pursuant to
	applicable law); (iv) guaranteed by the subsidiary guarantors and
	the JV subsidiary guarantors (if any) on a senior basis, subject to
	certain limitations; (v) effectively subordinated to the secured
	obligations of Kaisa, the subsidiary guarantors and the JV
	subsidiary guarantors (if any) to the extent of the value of the assets
	serving as security therefor; and (vi) effectively subordinated to all
	existing and future obligations of the subsidiaries of Kaisa which
	are not subsidiary guarantors or JV subsidiary guarantors (if any).
Redemption/repurchase	: At any time and from time to time on or after 11 November 2023,
	Kaisa may at its option redeem the New Kaisa Notes, in whole or in
	part, at a redemption price equal to the percentage of notional
	amount set forth below, plus accrued and unpaid interest, if any, to
	(but not including) the redemption date if redeemed during the 12-
	month period commencing on 11 November of any year set forth
	below:
	Period	Redemption Price
	2023	104%
	2024	102%

At any time prior to 11 November 2023, Kaisa may at its option redeem the New Kaisa Notes, in whole but not in part, at a redemption price equal to 100% of the notional amount of the New Kaisa Notes, plus the applicable premium as of, and accrued and unpaid interest (if any), to the redemption date.

In addition, at any time prior to 11 November 2023, Kaisa may redeem up to 35% of the aggregate notional amount of the New Kaisa Notes with the net cash proceeds of one or more sales of common stock of Kaisa in an equity offering at a redemption price of 111.7% of the notional amount of the New Kaisa Notes, plus accrued and unpaid interest (if any) to the redemption date; provided that at least 65% of the aggregate notional amount of the New Kaisa Notes issued on the original issue date remains outstanding after each such redemption and any such redemption takes place within 60 days after the closing of the related equity offering.

Not later than 30 days following a change of control triggering event, Kaisa will make an offer to purchase all outstanding New Kaisa Notes at a purchase price equal to 101% of their notional amount plus accrued and unpaid interest, if any, to the date of repurchase.

3

Listing	:	The New Kaisa Notes are listed and quoted on the SGX-ST.
Further information on the	New Kaisa Notes is disclosed in the Kaisa Announcement.

INFORMATION ON THE 9.375% KAISA NOTES EXCHANGED FOR THE NEW KAISA NOTES UNDER THE EXCHANGE OFFER

Under the Exchange Offer, each of AO Noteholder, ASI Noteholder and ASH Noteholder will, in addition to the New Kaisa Notes issued to it, receive the accrued and unpaid interest on the 9.375% Kaisa Notes validly tendered and accepted under the Exchange Offer up to but excluding the settlement date.

As at 30 September 2020, the carrying value of the 9.375% Kaisa Notes exchanged for the New Kaisa Notes by each of AO Noteholder, ASI Noteholder and ASH Noteholder under the Exchange Offer was approximately HK$31.5 million, HK$74.0 million and HK$73.6 million respectively. The net profits (both before and after taxation) attributable to the 9.375% Kaisa Notes exchanged for the New Kaisa Notes by AO Group, ASI Group and ASH Group under the Exchange Offer were approximately as follows:

	AO Group	ASI Group	ASH Group
For the financial year	HK$17.3 million	HK$14.3 million	HK$7.2 million
ended 31 March 2020
For the financial year	HK$17.9 million	HK$14.7 million	HK$7.2 million
ended 31 March 2019

FINANCIAL EFFECTS OF THE EXCHANGE OF KAISA NOTES

As a result of the Exchange of Kaisa Notes, it is expected that AO Group, ASI Group and ASH Group will record, on a consolidated basis, a gain before tax and before non-controlling interest of approximately HK$4.6 million, HK$4.2 million and HK$2.5 million respectively, in the current financial year. The gain represents the difference between the consideration and the cost of the 9.375% Kaisa Notes exchanged for the New Kaisa Notes by AO Noteholder, ASI Noteholder and/or ASH Noteholder under the Exchange Offer, less the incremental interest income from the difference between the yield and the coupon amortised to profit or loss in prior years, plus the written back of expected credit loss and the reversal of unrealised exchange loss recognised in prior years.

AO Directors, ASI Directors and ASH Directors intend to apply the amount received from the Exchange of Kaisa Notes as general working capital.

REASONS FOR AND BENEFITS OF THE EXCHANGE OF KAISA NOTES

The Exchange of Kaisa Notes forms part of the investing activities of AO Group, ASI Group and ASH Group, which were conducted in their ordinary and usual course of business. As part of their principal business, AO Group, ASI Group and ASH Group monitor the performance of their respective securities portfolios and make adjustments to them (with regard to the types and/or amounts of the securities held) from time to time.

4

Having considered the terms of the Exchange Offer and the New Kaisa Notes, AO Directors, ASI Directors and ASH Directors respectively are of the view that the terms thereof are fair and reasonable and the Exchange of Kaisa Notes is in the interests of AO, ASI, ASH and their respective shareholders as a whole.

INFORMATION ON AO, ASI, ASH, AO NOTEHOLDER, ASI NOTEHOLDER AND ASH NOTEHOLDER

AO is a limited liability company incorporated in Bermuda whose shares are listed on the Main Board. AO Group is principally engaged in property management, development and investment, hotel operations and securities investments.

ASI is a limited liability company incorporated in Bermuda whose shares are listed on the Main Board. ASI Group is principally engaged in investment and development of commercial, retail and residential properties and securities investments. Through ASH, ASI Group is also involved in hotel operations.

ASH is a limited liability company incorporated in Bermuda whose shares are listed on the Main Board. The principal activity of ASH is investment holding. The principal activities of the subsidiaries of ASH consist of holding and operating hotels, property development and securities investments.

AO Noteholder is a company incorporated in the British Virgin Islands with limited liability and an indirect wholly-owned subsidiary of AO. As at the date hereof, it is principally engaged in securities investments.

ASI Noteholder is a company incorporated in the British Virgin Islands with limited liability and an indirect wholly-owned subsidiary of ASI. As at the date hereof, it is principally engaged in securities investments.

ASH Noteholder is a company incorporated in the British Virgin Islands with limited liability and an indirect wholly-owned subsidiary of ASH. As at the date hereof, it is principally engaged in securities investments.

INFORMATION ON KAISA

Kaisa is an investment holding company, and its subsidiaries are principally engaged in property development, property investment, property management, hotel and catering operations, cinema, department store and cultural centre operations, water-way passenger and cargo transportation and healthcare business in the PRC.

To the best of the knowledge, information and belief of AO Directors, ASI Directors and ASH Directors having made all reasonable enquiries (based on the information available to AO, ASI and ASH), Kaisa and its ultimate beneficial owners are Independent Third Parties.

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios in respect of the Exchange of Kaisa Notes, when aggregated with the Previous Disposals, exceeds 25% but is or are less than 75% for each of AO and ASH, the Exchange of Kaisa Notes constitutes a major transaction for each of AO and ASH, and is therefore subject to the reporting, announcement, circular and shareholders' approval requirements under Chapter 14 of the Listing Rules.

5