Asia Standard International : Discloseable Transaction in relation to the Exchange of Fineland 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)
VOLUNTARY	DISCLOSEABLE	DISCLOSEABLE
ANNOUNCEMENT	TRANSACTION	TRANSACTION

IN RELATION TO

THE EXCHANGE OF FINELAND NOTES

THE EXCHANGE OF FINELAND NOTES

On 20 January 2021, ASI Noteholder and ASH Noteholder exchanged their respective 13.5% Fineland Notes in the notional amount of US$20 million (equivalent to approximately HK$155.1 million) for the New Fineland Notes in the same notional amount.

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios in respect of the Exchange of Fineland Notes exceeds 5% but is or are less than 25% for each of ASI and ASH, the Exchange of Fineland Notes 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 Listi ng Rules.

As all of the applicable percentage ratios in respect of the Exchange of Fineland Notes are below 5% for AO, the Exchange of Fineland Notes does not constitute a notifiable transaction for AO under Chapter 14 of the Listing Rules.

THE EXCHANGE OF FINELAND NOTES

On 20 January 2021, ASI Noteholder and ASH Noteholder exchanged their respective 13.5% Fineland Notes in the notional amount of US$20 million (equivalent to approximately HK$155.1 million) for the New Fineland Notes in the same notional amount.

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The settlement date will occur on or about 27 January 2021 unless the Exchange Offer is extended or earlier terminated.

Given that ASI Noteholder and ASH Noteholder used their respective 13.5% Fineland Notes to exchange for the New Fineland Notes in the same notional amounts, no cash consideration was paid by them under the Exchange of Fineland Notes.

INFORMATION ON THE NEW FINELAND NOTES

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

Issuer	:	Fineland
Interest rate and interest	: The New Fineland Notes will bear interest from 27 January 2021 at a
payment dates		rate of 13.6% per annum, payable semi-annually in arrears on 27
		January and 27 July of each year, commencing on 27 July 2021.
Ranking	: The New Fineland Notes will be (i) general obligations of Fineland;
		(ii) senior in right of payment to any existing and future obligations of
		Fineland expressly subordinated in right of payment to the New
		Fineland Notes, (iii) at least pari passu in right of payment with all
		unsecured, unsubordinated indebtedness of Fineland (subject to any
		priority rights of such unsecured, 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 the limitations described in the offering memorandum, (v)
		effectively subordinated to the secured obligations (if any) of
		Fineland, 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 non-guarantor subsidiaries.
Redemption/repurchase	:	Unless previously redeemed or purchased and cancelled, the New
		Fineland Notes will mature on 27 July 2023.

At any time prior to 27 July 2023, Fineland may at its option redeem the New Fineland Notes, in whole but not in part, at a redemption price equal to 100% of the notional amount of the New Fineland Notes plus the applicable premium as of, and accrued and unpaid interest, if any, to (but not including) the redemption date.

At any time and from time to time prior to 27 July 2023, Fineland may redeem up to 35% of the aggregate notional outstanding amount of the New Fineland Notes with the net cash proceeds of one or more sales of common stock of Fineland in an equity offering at a redemption price of 113.6% of the notional amount of the New Fineland Notes, plus accrued and unpaid interest, if any, to (but not including) the redemption date, provided that at least 65% of the aggregate notional amount of the New Fineland Notes originally 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.

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	Not later than 30 days following a change of control triggering event,
	Fineland will make an offer to purchase/repurchase all outstanding
	New Fineland Notes at a purchase price equal to 101% of their
	notional amount plus accrued and unpaid interest, if any, to (but not
	including) the offer to purchase/repurchase payment date.
	If completion of the registration of the New Fineland Notes with
	SAFE (Guangdong branch) and delivery of an officers' certificate
	to the trustee shall not have occurred on or prior to the 90th
	business day of SAFE (Guangdong branch) after the original issue
	date of the New Fineland Notes, Fineland will make an offer to
	purchase/repurchase all outstanding New Fineland Notes with respect
	to which the abovementioned event has occurred at a purchase price
	equal to 101% of their notional amount plus accrued and unpaid
	interest, if any, to (but not including) the date of purchase/repurchase.
Transferability	: The New Fineland Notes are freely transferrable by the holders
	thereof to any person subject to the terms and conditions of the New
	Fineland Notes.
Listing	: Application will be made to the SGX-ST for the listing and quotation
	of the New Fineland Notes on the SGX-ST.

INFORMATION ON THE 13.5% FINELAND NOTES EXCHANGED FOR THE NEW FINELAND NOTES UNDER THE EXCHANGE OFFER

Under the Exchange Offer, each of ASI Noteholder and ASH Noteholder will, in addition to the New Fineland Notes issued to it in the notional amount of US$20 million, receive a cash consideration of US$200,000 (equivalent to approximately HK$1.6 million) and the accrued and unpaid interest on the 13.5% Fineland 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 13.5% Fineland Notes exchanged for the New Fineland Notes by each of ASI Noteholder and ASH Noteholder under the Exchange Offer was approximately HK$155.7 million. The net profits (both before and after taxation) attributable to the 13.5% Fineland Notes exchanged for the New Fineland Notes by ASI Noteholder and ASH Noteholder under the Exchange Offer were approximately HK$18.5 million and approximately HK$18.4 million respectively for the financial year ended 31 March 2020.

FINANCIAL EFFECTS OF THE EXCHANGE OF FINELAND NOTES

As a result of the Exchange of Fineland Notes, it is expected that ASI Group and ASH Group will record, on a consolidated basis, a gain before tax and before non-controlling interest of approximately HK$6.2 million and HK$3.1 million respectively, in the current financial year. The gain represents the difference between the consideration and the cost of the 13.5% Fineland Notes exchanged for the New Fineland Notes by 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. ASI Directors and ASH Directors intend to apply the amount received as general working capital.

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REASONS FOR AND BENEFITS OF THE EXCHANGE OF FINELAND NOTES

The Exchange of Fineland Notes forms part of the investing activities of ASI Group and ASH Group, which were conducted in their ordinary and usual course of business. As part of the principal business, 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.

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

INFORMATION ON AO, ASI, ASH, 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.

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 FINELAND

According to the offering memorandum of the New Fineland Notes, Fineland is a property development company headquartered in Guangzhou, the PRC focusing on the development of mid- end and high-end residential properties and high-end commercial properties, and is 100% beneficially owned by Mr. Fong Ming.

To the best of the knowledge, information and belief of ASI Directors and ASH Directors having made all reasonable enquiries, Fineland and its ultimate beneficial owner are Independent Third Parties of ASI and ASH.

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