Glorious Sun Enterprises : Major and Connected Transaction - Disposal of Interest in Jeanswest International (L) Limited; Continuing Connected Transactions - Supply of Apparel Products and Accessories

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GLORIOUS SUN ENTERPRISES LIMITED

旭 日 企 業 有 限 公 司

(Incorporated in Bermuda with limited liability)

(Stock Code: 393)

MAJOR AND CONNECTED TRANSACTION DISPOSAL OF INTEREST IN JEANSWEST INTERNATIONAL (L) LIMITED CONTINUING CONNECTED TRANSACTIONS SUPPLY OF APPAREL PRODUCTS AND ACCESSORIES

The Board is pleased to announce that on 6 April 2017, the Group (through its wholly-owned subsidiary) entered into the Sale and Purchase Agreement to dispose of its interest in the Target Company to the Purchaser, a company owned by Dr. Charles Yeung and Mr. Yeung Chun Fan (directors and substantial shareholders of the Company) at a consideration of HK$220,000,000. The Target Group is engaged in the retailing of apparel products and accessories in Australasia.

The Group has been supplying apparel products and accessories to the Target Group, and it is expected that the Group will continue to supply apparel products and accessories to the Target Group after the Disposal. As such, the Company and the Target Company entered into the Master Supply Agreement to set out the basis and terms of such transactions.

The Purchaser is a company owned by Dr. Charles Yeung and Mr. Yeung Chun Fan, directors and substantial shareholders of the Company. Accordingly, the Purchaser is a connected person of the Company and the Disposal constitutes a connected transaction for the Company under Chapter 14A of the Listing Rules. As the highest applicable percentage ratio (as defined in the Listing Rules) in respect of the Disposal is 25% or more but less than 75%, the Disposal also constitutes a major transaction for the Company. The Disposal is subject to the reporting, announcement and independent shareholders' approval requirements under the Listing Rules.

Upon Completion, the Target Company will cease to be a subsidiary of the Company and will become a wholly-owned subsidiary of the Purchaser. Accordingly, the Target Company and its subsidiaries will become connected persons of the Company and the transactions contemplated under the Master Supply Agreement will constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules. As the highest applicable percentage ratio (as defined in the Listing Rules) in respect of the Master Supply Agreement calculated with reference to the highest Cap is 5% or more, the Master Supply Agreement and the transactions contemplated thereunder are subject to the reporting, annual review, announcement and independent shareholders' approval requirements under the Listing Rules.

An independent board committee of the Company, comprising Mr. Lau Hon Chuen, Ambrose, Dr. Chung Shui Ming, Timpson, Mr. Wong Man Kong, Peter and Dr. Lam Lee G., all being independent non-executive Directors, has been established to advise the Independent Shareholders in respect of the Sale and Purchase Agreement and the transactions contemplated thereunder, and the Master Supply Agreement and the transactions contemplated thereunder. Yu Ming Investment Management Limited has been appointed as the Independent Financial Adviser to provide advice and recommendation to the independent board committee and the Independent Shareholders in respect of the Sale and Purchase Agreement and the transactions contemplated thereunder, and the Master Supply Agreement and the transactions contemplated thereunder.

The SGM will be convened for the Independent Shareholders to approve the Sale and Purchase Agreement and the transactions contemplated thereunder, and the Master Supply Agreement and the transactions contemplated thereunder (including the Caps) by poll. Dr. Charles Yeung and Mr. Yeung Chun Fan and their respective associates (together holding approximately 63.8% interest in the Company) will abstain from voting on the resolutions to approve the Sale and Purchase Agreement and the transactions contemplated thereunder, and the Master Supply Agreement and the transactions contemplated thereunder (including the Caps).

A circular containing, amongst others, further information on the Sale and Purchase Agreement and the transactions contemplated thereunder, and the Master Supply Agreement and the transactions contemplated thereunder (including the Caps), the recommendation from the independent board committee of the Company, the advice and recommendation from the Independent Financial Adviser, and a notice to convene the SGM will be despatched to the Shareholders on or before 2 May 2017.

The Board is pleased to announce that on 6 April 2017, the Group (through its wholly- owned subsidiary) entered into the Sale and Purchase Agreement to dispose of its interest in the Target Company to the Purchaser, a company owned by Dr. Charles Yeung and Mr. Yeung Chun Fan (directors and substantial shareholders of the Company), details of which are set out below.

THE SALE AND PURCHASE AGREEMENT Date

6 April 2017

Parties

1. the Vendor, a wholly-owned subsidiary of the Company

2. the Purchaser, a company owned by Dr. Charles Yeung and Mr. Yeung Chun Fan

Assets to be sold

1. the Sale Share, representing 100% of the total issued share capital in the Target Company; and

2. the Sale Loan in the amount of HK$174,000,000.

Consideration

The Consideration of HK$220,000,000 comprises:

1. HK$46,000,000 for the Sale Share; and

2. HK$174,000,000 for the Sale Loan, being the face value of the total amount of the Sale Loan.

The Consideration will be settled in cash at Completion.

The Consideration has been determined after arm's length negotiations between the parties with reference to (i) the business conditions of the Target Group; (ii) the financial position of the Target Group as at 31 March 2017; (iii) the historical profits and losses of the Target Group including those up to 31 March 2017; (iv) any profits (and losses) of the Target Group accrued on or before 31 March 2017 shall belong to (or be borne by) the Vendor; and (v) the retail market conditions and macroeconomic environment of Australasia.

Conditions Precedent

Completion is conditional upon the fulfillment or waiver of following conditions on or before 30 September 2017 (or such other date as may be agreed between the Vendor and the Purchaser):

1. the Independent Shareholders having approved the Sale and Purchase Agreement and the transactions contemplated thereunder at the SGM;

2. the Vendor and/or the Company obtaining all necessary consents, approvals, clearances and authorisations of any relevant regulatory authorities in Hong Kong (including the Stock Exchange) or other relevant third parties in Hong Kong as required for the transactions contemplated under the Sale and Purchase Agreement; and

3. the warranties in the Sale and Purchase Agreement remaining true and accurate in all material respects as at the date of the Sale and Purchase Agreement and as at Completion.

Save and except for condition (c) above (which may be waived at the discretion of the Purchaser), none of the conditions can be waived.

Completion

Completion shall take place on the fifth business day after all the conditions have been fulfilled or waived, or such other date as the parties may agree.

Upon Completion, the Target Company will cease to be a subsidiary of the Company and the financial results of the Target Group will no longer be consolidated into the Group's financial statements after Completion.

THE MASTER SUPPLY AGREEMENT

The Group has been supplying apparel products and accessories to the Target Group, and it is expected that the Group will continue to supply apparel products and accessories to the Target Group after the Disposal. Upon Completion, the Target Company will become a wholly-owned subsidiary of the Purchaser, which is a company owned by Dr. Charles Yeung and Mr. Yeung Chun Fan (directors and substantial shareholders of the Company). As such, the supply of apparel products and accessories to the Target Group by the Group will constitute continuing connected transactions for the Company and the Company and the Target Company entered into the Master Supply Agreement to set out the basis and terms of such transactions.

Date

6 April 2017

Parties

1. the Company

2. the Target Company

Transaction Nature

The Group will supply to the Target Group apparel products and accessories.