Asia Standard International : Discloseable Transaction in relation to Investment in the Guangzhou R&F 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	DISCLOSEABLE	DISCLOSEABLE
TRANSACTION	TRANSACTION	TRANSACTION

IN RELATION TO

INVESTMENT IN THE GUANGZHOU R&F NOTES

THE INVESTMENT

On 21 December 2020, AO Investor, ASI Investor and ASH Investor entered into the TRS Arrangements arranged by Morgan Stanley in relation to the investments in the 6.8% Guangzhou R&F Notes and the 7.4% Guangzhou R&F Notes at an aggregate consideration approximately RMB378.3 million (equivalent to approximately HK$449.4 million), approximately RMB310.3 million (equivalent to approximately HK$368.6 million) and approximately RMB280.6 million (equivalent to approximately HK$333.4 million) respectively.

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios in respect of the Investment, after aggregation with the Previous Investments, exceeds 25% but is or are less than 100% for AO, the Investment constitutes a major transaction for AO, and is therefore subject to the reporting, announcement, circular and shareholders' approval requirements under Chapter 14 of the Listing Rules.

Given that none of the AO Shareholders have a material interest in the Investment, none of them would be required to abstain from voting if a general meeting of AO were to be convened to approve the Investment. Pursuant to Rule 14.44 of the Listing Rules, AO had obtained a written approval from the AO Closely Allied Group (which together hold approximately 51.05% of the issued share capital of AO as at the date of this joint announcement) to approve the Investment. Therefore, no general meeting of AO will be convened to approve the Investment.

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As one or more of the applicable percentage ratios in respect of the Investment, after aggregation with the Previous Investments, exceeds 5% but is or are less than 25% for each of ASI and ASH, the Investment constitutes a discloseable transaction for each of ASI and ASH, and is therefore subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

DESPATCH OF CIRCULAR

A circular containing further information on the Investment will be despatched to the AO Shareholders as soon as possible, which is expected to be on or before 15 January 2021.

THE INVESTMENT

On 21 December 2020, AO Investor, ASI Investor and ASH Investor entered into the TRS Arrangements arranged by Morgan Stanley in relation to the investments in the 6.8% Guangzhou R&F Notes and the 7.4% Guangzhou R&F Notes by way of the total return swap arrangements, details of which are as follows:-

• In respect of the 6.8% Guangzhou R&F Notes

	AO Investor	ASI Investor	ASH Investor
Notional amount	RMB266.0 million	RMB218.0 million	RMB197.0 million
	(equivalent to	(equivalent to	(equivalent to
	approximately	approximately	approximately
	HK$316.0 million)	HK$259.0 million)	HK$234.0 million)
Consideration	approximately	approximately	approximately
(includes unpaid	RMB232.3 million	RMB190.4 million	RMB172.1 million
interests accrued)	(equivalent to	(equivalent to	(equivalent to
	approximately	approximately	approximately
	HK$276.0 million)	HK$226.2 million)	HK$204.5 million)

• In respect of the 7.4% Guangzhou R&F Notes

	AO Investor	ASI Investor	ASH Investor
Notional amount	RMB179.0 million	RMB147.0 million	RMB133.0 million
	(equivalent to	(equivalent to	(equivalent to
	approximately	approximately	approximately
	HK$212.7 million)	HK$174.6 million)	HK$158.0 million)
Consideration	approximately	approximately	approximately
(includes unpaid	RMB146.0 million	RMB119.9 million	RMB108.5 million
interests accrued)	(equivalent to	(equivalent to	(equivalent to
	approximately	approximately	approximately
	HK$173.4 million)	HK$142.4 million)	HK$128.9 million)

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INFORMATION ON THE GUANGZHOU R&F NOTES UNDER THE TRS ARRANGEMENTS

The 6.8% Guangzhou R&F Notes bear interest at a rate of 6.8% per annum, payable in arrears on each anniversary of the issue date until the maturity date of 16 May 2022, and are listed and quoted on the Shanghai Stock Exchange.

The 7.4% Guangzhou R&F Notes bear interest at a rate of 7.4% per annum, payable in arrears on each anniversary of the issue date until the maturity date of 19 October 2022, and are listed and quoted on the Shenzhen Stock Exchange.

Guangzhou R&F and its subsidiaries are principally engaged in the development and sale of properties, property investment, hotel operations and other property development related services in the PRC.

Given that the 6.8% Guangzhou R&F Notes and the 7.4% Guangzhou R&F Notes are the underlying reference notes of the TRS Arrangements, AO Group, ASI Group and ASH Group will not have actual ownership interest or any proprietary rights in such notes. Instead, AO Group, ASI Group and ASH Group will hold the notes issued by Emerald Bay under the TRS Arrangements which are linked to the 6.8% Guangzhou R&F Notes and the 7.4% Guangzhou R&F Notes and structured based on the total return swap arrangements between Emerald Bay and Morgan Stanley.

REASONS FOR AND BENEFITS OF THE INVESTMENT

The Investment forms part of the investing activities of AO Group, ASI Group and ASH Group, which are 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. AO Group, ASI Group and ASH Group intend to fund the Investment by their respective internal cash resources.

Having considered the terms of the Investment (including the consideration (which includes unpaid interests accrued on the relevant Guangzhou R&F Notes), interest rate and maturity date of the relevant Guangzhou R&F Notes, etc.), AO Directors, ASI Directors and ASH Directors respectively are of the view that such terms are fair and reasonable and the Investment is in the interests of AO, ASI, ASH and their respective shareholders as a whole.

INFORMATION ON AO, ASI, ASH, AO INVESTOR, ASI INVESTOR AND ASH INVESTOR

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.

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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 in Hong Kong and the PRC and securities investments. Through ASH, ASI 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 Investor 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 investment.

ASI Investor 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 investment.

ASH Investor 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 investment.

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios in respect of the Investment, after aggregation with the Previous Investments, exceeds 25% but is or are less than 100% for AO, the Investment constitutes a major transaction for AO, and is therefore subject to the reporting, announcement, circular and shareholders' approval requirements under Chapter 14 of the Listing Rules.

Given that none of the AO Shareholders have a material interest in the Investment, none of them would be required to abstain from voting if a general meeting of AO were to be convened to approve the Investment. Pursuant to Rule 14.44 of the Listing Rules, AO had obtained a written approval from the AO Closely Allied Group (which together hold approximately 51.05% of the issued share capital of AO as at the date of this joint announcement) to approve the Investment. Therefore, no general meeting of AO will be convened to approve the Investment. The AO Closely Allied Group comprises the following AO Shareholders:-

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