Asia Television : (1) PROPOSED CAPITAL REORGANISATION; (2) PROPOSED CHANGE IN BOARD LOT SIZE; (3) CONNECTED TRANSACTION IN RELATION TO SUBSCRIPTION OF CONVERTIBLE BONDS UNDER SPECIFIC MANDATE; AND (4) SUBSCRIPTION OF CONVERTIBLE BONDS UNDER SPECIFIC MANDATE

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 the 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 purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company.

ASIA TELEVISION HOLDINGS LIMITED

亞洲電視控股有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 707)

1. PROPOSED CAPITAL REORGANISATION;
2. PROPOSED CHANGE IN BOARD LOT SIZE;
3. CONNECTED TRANSACTION IN RELATION TO SUBSCRIPTION OF CONVERTIBLE BONDS
   UNDER SPECIFIC MANDATE;

AND

1. 1. SUBSCRIPTION OF CONVERTIBLE BONDS UNDER SPECIFIC MANDATE
2. PROPOSED CAPITAL REORGANISATION
   The Board proposes to implement the Capital Reorganisation which comprises the following:
3. 1. the Share Consolidation on the basis that every ten (10) issued and unissued Existing Shares of par value of HK$0.1 each in the share capital of the Company will be consolidated into one (1) Consolidated Share of par value of HK$1.0 each;
   2. the Capital Reduction by way of a reduction of the issued share capital of the Company through a cancellation the paid up capital to the extent of HK$0.99 on each of the then issued Consolidated Shares such that the par value of each issued Consolidated Share will be reduced from HK$1.0 to HK$0.01; and

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1. 1. the Share Sub-division on the basis that each of the authorised but unissued Consolidated Shares of par value of HK$1.0 each will be sub-divided into one hundred (100) Adjusted Shares of par value of HK$0.01 each.
2. PROPOSED CHANGE IN BOARD LOT SIZE
   As at the date of this announcement, the Existing Shares are traded on the Stock Exchange in the board lot size of 2,000 Existing Shares. Subject to the Capital Reorganisation becoming effective, it is proposed that the board lot size for trading in the Shares shall be changed from 2,000 Existing Shares to 6,000 Adjusted Shares.
3. CONNECTED TRANSACTION IN RELATION TO SUBSCRIPTION OF CONVERTIBLE BONDS UNDER SPECIFIC MANDATE
   On 14 May 2021 (after trading hours), the Company entered into the Subscription Agreement A with the Subscriber A, pursuant to which the Subscriber A has conditionally agreed to subscribe for and the Company has conditionally agreed to issue the Convertible Bonds A in two phases in an aggregate principal amount of HK$200,000,000 at the Conversion Price A of HK$0.10 per Conversion Share A (or HK$1.0 per Conversion Share A after the Capital Reorganisation becoming effective).
   Assuming all the Conversion Shares A are converted in full at the initial Conversion Price A of HK$0.10 per Conversion Share A (or HK$1.0 per Conversion Share A after the Capital Reorganisation becoming effective), an aggregate of 2,000,000,000 Conversion Shares A (or 200,000,000 Conversion Shares A after the Capital Reorganisation becoming effective) will be issued, which represent (i) approximately 20.15% of the total issued share capital of the Company as at the date of this announcement; and (ii) approximately 16.77% of the total issued share capital of the Company as enlarged by the issue of the Conversion Shares A.
   The Company will seek the Specific Mandate A from the Independent Shareholders at the EGM for the allotment and issue of the Conversion Shares A.
4. SUBSCRIPTION OF CONVERTIBLE BONDS UNDER SPECIFIC MANDATE
   On 14 May 2021 (after trading hours), the Company entered into the Subscription Agreement B with the Subscriber B, pursuant to which the Subscriber B has conditionally agreed to subscribe for and the Company has conditionally agreed to issue the Convertible Bonds B in an aggregate principal amount of HK$300,000,000 at the Conversion Price B of HK$0.10 per Conversion Share B (or HK$1.0 per Conversion Share B after the Capital Reorganisation becoming effective).

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Assuming all the Conversion Shares B are converted in full at the initial Conversion Price B of HK$0.10 per Conversion Share B (or HK$1.0 per Conversion Share B after the Capital Reorganisation becoming effective), an aggregate of 3,000,000,000 Conversion Shares B (or 300,000,000 Conversion Shares B after the Capital Reorganisation becoming effective) will be issued, which represent (i) approximately 30.22% of the total issued share capital of the Company as at the date of this announcement; and (ii) approximately 23.21% of the total issued share capital of the Company as enlarged by the issue of the Conversion Shares B.

The Company will seek the Specific Mandate B from the Shareholders at the EGM for the allotment and issue of the Conversion Shares B.

LISTING RULES IMPLICATIONS

As at the date of this announcement, the Subscriber A is the Co-Chairman and non-executive Director of the Company who is beneficially interested in 921,084,000 Shares, representing approximately 9.28% of the total issued share capital of the Company. The Subscriber A is therefore a connected person of the Company and the Subscription A constitutes a connected transaction of the Company and is subject to the reporting, announcement, Independent Shareholders' approval requirements under the Listing Rules.

The Independent Board Committee has been established by the Company to advise the Independent Shareholders in relation to the Subscription Agreement A and the transactions contemplated thereunder, including but not limited to the issue of Convertible Bonds A and the Conversion Shares A, and the grant of the Specific Mandate A. An independent financial adviser will be appointed by the Company to advise the Independent Board Committee and the Independent Shareholders in this regard.

EGM

The EGM will be convened and held for (i) the Shareholders to consider and, if thought fit, approve the Capital Reorganisation, the Subscription Agreement B and the transactions contemplated thereunder, including but not limited to the issue of Convertible Bonds B and the Conversion Shares B, and the grant of the Specific Mandate B; and (ii) the Independent Shareholders to consider and, if thought fit, approve the Subscription Agreement A and the transactions contemplated thereunder, including but not limited to the issue of Convertible Bonds A and the Conversion Shares A, and the grant of the Specific Mandate A.

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GENERAL

A circular containing, among other things, (i) further details of the Capital Reorganisation; (ii) further details of the Subscriptions; (iii) a letter of recommendation from the Independent Board Committee to the Independent Shareholders in respect of the Subscription A; (iv) a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Subscription A; and (v) a notice convening the EGM, will be despatched to the Shareholders as soon as practicable in accordance with the Listing Rules.

Shareholders and potential investors should note that the Capital Reorganisation and the Change in Board Lot Size are subject to the satisfaction of the conditions. Accordingly, the Capital Reorganisation and the Change in Board Lot Size may or may not proceed. Shareholders and potential investors are advised to exercise caution when dealing in the Shares.

Shareholders and potential investors should also note that Completions are subject to the fulfillment of the conditions precedent as set out in the respective Subscription Agreements. As the Subscription A and Subscription B, which are not inter-conditional, may or may not proceed, Shareholders and potential investors are advised to exercise caution when dealing in the Shares.

1. PROPOSED CAPITAL REORGANISATION
   The Board proposes to implement the Capital Reorganisation which comprises the following:
2. 1. the Share Consolidation on the basis that every ten (10) issued and unissued Existing Shares of par value of HK$0.1 each in the share capital of the Company will be consolidated into one (1) Consolidated Share of par value of HK$1.0 each;
   2. the Capital Reduction by way of a reduction of the issued share capital of the Company through a cancellation the paid up capital to the extent of HK$0.99 on each of the then issued Consolidated Shares such that the par value of each issued Consolidated Share will be reduced from HK$1.0 to HK$0.01; and
   3. the Share Sub-division on the basis that each of the authorised but unissued Consolidated Shares of par value of HK$1.0 each will be sub-divided into one hundred (100) Adjusted Shares of par value of HK$0.01 each.

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Effects of the Capital Reorganisation

As at the date of this announcement, the authorised share capital of the Company is HK$2,000,000,000 divided into 20,000,000,000 Existing Shares of par value HK$0.1 each. Following the Capital Reorganisation becoming effective, the authorised share capital would be HK$2,000,000,000 divided into 200,000,000,000 Adjusted Shares of par value HK$0.01 each.

Following the Capital Reorganisation becoming effective (assuming there is no issuance of new Shares or repurchase of Shares by the Company from the date of this announcement up to the effective day of the Capital Reorganisation), the issued share capital of the Company would be reduced from HK$992,566,800 divided into 9,925,668,000 Existing Shares of par value HK$0.1 each to HK$9,925,668 divided into 992,566,800 Adjusted Shares of par value HK$0.01 each.

A credit amount of approximately HK$982,641,132 will arise as a result of the Capital Reduction. It is proposed that the credit arising from the Capital Reduction will be credited to the distributable reserve account of the Company, which will be utilised by the Company in such manner as the Board may deem fit and permitted under all applicable laws and the Memorandum and Articles.

Shareholders and potential investors of the Company should note that the credits arising in the books from the Capital Reduction will be subject to change depending on the number of the Existing Shares in issue immediately prior to the Capital Reorganisation becoming effective.

As at the date of this announcement, there are outstanding Convertible Bonds 2020 with principal amount of HK$150,000,000 which are convertible into 1,500,000,000 Existing Shares at the conversion price of HK$0.1 per Existing Share. The Capital Reorganisation may lead to adjustment to the conversion price and the number of Shares falling to be issued upon the exercise of the conversion right attaching to the Convertible Bonds 2020 in accordance with the terms and conditions of the Convertible Bonds 2020. The Company will make further announcement(s) on such adjustment(s) as and when appropriate. Save for the Convertible Bonds 2020, the Company does not have any derivatives, options, warrants and conversion rights or other similar rights which are convertible or exchangeable into, any Existing Shares or Adjusted Shares.

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