Lai Sun Garment International : JOINT ANNOUNCEMENT - DISCLOSEABLE TRANSACTION IN RELATION TO DEEMED DISPOSAL OF INTERESTS

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.

This joint announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities of the Company or LSG.

	Lai Sun Development Company Limited
	(Incorporated in Hong Kong with limited liability)
	(Stock Code: 488)
JOINT ANNOUNCEMENT
DISCLOSEABLE TRANSACTION	(1) SUBSCRIPTION
IN RELATION TO	AGREEMENT AND ISSUE OF
DEEMED DISPOSAL OF	NEW SHARES UNDER GENERAL
INTERESTS	MANDATE; AND
	(2) RESTORATION OF PUBLIC
	FLOAT

SUBSCRIPTION AGREEMENT AND ISSUE OF NEW SHARES UNDER GENERAL MANDATE

The Board is pleased to announce that on 12 August 2021 (after trading hours), the Company, the Subscriber and the Manager entered into the Subscription Agreement, pursuant to which the Subscriber has conditionally agreed to subscribe for, and the Company has conditionally agreed to issue to the Subscriber, an aggregate of 67,669,800 new Shares at the Subscription Share Price on the terms and subject to the conditions set out in the Subscription Agreement.

The gross proceeds from the Subscription will be approximately HK$470.3 million. The net proceeds from the Subscription (after deducting the expenses incurred in the Subscription) is estimated to be approximately HK$470.0 million. The number of the Subscription Shares represents: (a) approximately 11.06% of the total number of Shares in issue as at the date of this joint announcement; and (b) approximately 9.95% of the total number of issued Shares as enlarged by the allotment and issue of the Subscription Shares.

The Company intends to apply the net proceeds from the Subscription (i) as to approximately HK$200 million for repayment of certain bank borrowings subject to the Group's operating needs; and (ii) the remaining to finance future investments in property investments and/or development projects.

- 1 -

The Company shall make an application to the Listing Committee for the listing of, and permission to deal in, the Subscription Shares.

The Subscription Shares will be allotted and issued pursuant to the General Mandate.

Completion of the Subscription is subject to fulfillment of the conditions precedent set out in the Subscription Agreement, and the Subscription may or may not proceed to Subscription Completion. Shareholders and potential investors are reminded to exercise caution when dealing in the securities of the Company.

LISTING RULES IMPLICATIONS FOR THE COMPANY

The allotment and issue of the Subscription Shares will be made pursuant to the General Mandate granted to the Directors by the Shareholders at the AGM subject to a limit of up to 20% of the total number of issued Shares as at the date of the AGM (i.e. 122,417,805 Shares, representing approximately 20.0% of 612,089,025 Shares in issue as at the date of the AGM). Accordingly, the allotment and issue of the Subscription Shares will not be subject to Shareholders' approval. Up to the date of this joint announcement, the General Mandate has not been utilised. The issue of the Subscription Shares will utilise approximately 55.3% of the General Mandate.

LISTING RULES IMPLICATIONS FOR LSG

The Company is a subsidiary of LSG. As at the date of this joint announcement, LSG is interested in approximately 56.13% of the total number of issued Shares.

Upon the Subscription Completion, LSG's interest in the Company will be diluted to approximately 50.55%. As such, the Subscription will constitute a Deemed Disposal pursuant to Rule 14.29 of the Listing Rules. As the highest applicable percentage ratio (as defined in Chapter 14 of the Listing Rules) in respect of the Deemed Disposal exceeds 5% but is less than 25%, the Deemed Disposal constitutes a discloseable transaction of LSG under Chapter 14 of the Listing Rules and is therefore subject to the reporting and announcement requirements but is exempt from the circular and shareholders' approval requirements under Chapter 14 of the Listing Rules.

RESTORATION OF PUBLIC FLOAT

As disclosed in the announcement of the Company dated 28 June 2021, the public float of the Company remains below the minimum percentage of 25% as prescribed by Rule 8.08(1)(a) of the Listing Rules. As at the date of this joint announcement, the public float of the Company is approximately 17.08%.

- 2 -

Immediately following the Subscription Completion (assuming no further change in the number of Shares held in the hands of the public Shareholders from the date of this joint announcement to the date of allotment of the Subscription Shares), the number of Shares to be held by the public will increase from 104,550,848 Shares to 172,220,648 Shares, representing approximately 25.33% of the total number of issued Shares at the Subscription Completion (assuming no change in the number of Shares in issue from the date of this joint announcement to the date of allotment of the Subscription Shares save for the allotment and issue of the Subscription Shares). Accordingly, it is expected that the Company will be in compliance with the minimum public float requirement as set out in the Listing Rules immediately upon Subscription Completion.

THE SUBSCRIPTION AGREEMENT

The Board is pleased to announce that on 12 August 2021 (after trading hours), the Company, the Subscriber and the Manager entered into the Subscription Agreement, pursuant to which the Subscriber has conditionally agreed to subscribe for, and the Company has conditionally agreed to issue to the Subscriber, an aggregate of 67,669,800 new Shares at the Subscription Share Price on the terms and subject to the conditions set out in the Subscription Agreement.

Date

12 August 2021 (after trading hours)

Parties

The Company, the Subscriber and the Manager

To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, each of the Subscriber and the Manager (and the ultimate beneficial owner(s) of the Subscriber and the Manager, where applicable) are Independent Third Parties.

Details of the Subscription are set out below.

THE SUBSCRIPTION

Subscription Shares

The Subscriber has conditionally agreed to subscribe as principal for, and the Company has conditionally agreed to issue to the Subscriber, an aggregate of 67,669,800 new Shares at the Subscription Share Price free from all Encumbrance, in consideration for the payment of the Subscription Consideration by the Subscriber to the Company, subject to the terms and conditions of the Subscription Agreement.

The number of the Subscription Shares represents: (a) approximately 11.06% of the total number of Shares in issue as at the date of this joint announcement; and (b) approximately 9.95% of the total number of issued Shares as enlarged by the allotment and issue of the Subscription Shares.

- 3 -

Ranking of the Subscription Shares

The Subscription Shares shall, when fully paid, rank pari passu in all respects with all the other Shares in issue on or prior to the date of allotment of the Subscription Shares.

General Mandate to issue the Subscription Shares

The Subscription Shares will be issued under the General Mandate granted to the Directors by a resolution of the Shareholders passed at the AGM to among other things, issue, allot and deal with additional Shares not exceeding 20% of the total number of issued Shares as at the date of the AGM. Under the General Mandate, the Company is authorised to issue up to 122,417,805 new Shares. As at the date of this joint announcement, no securities of the Company have been issued under the General Mandate.

Subscription Share Price

The Subscription Share Price is HK$6.95, which:

1. represents a premium of approximately 1.3% to the closing price of HK$6.86 per Share as quoted on the Stock Exchange on 12 August 2021, the Last Trading Day;
2. represents a premium of approximately 2.2% to the average closing price of approximately HK$6.80 per Share as quoted on the Stock Exchange for the last five (5) consecutive trading days prior to and including the Last Trading Day;
3. represents a premium of approximately 4.2% to the average closing price of approximately HK$6.67 per Share as quoted on the Stock Exchange for the last ten (10) consecutive trading days prior to and including the Last Trading Day; and
4. represents a discount of approximately 87.8% to the latest published unaudited consolidated net asset value per Share as at 31 January 2021 of approximately
   HK$57.037 (as shown in the interim report of the Company for the six months ended 31 January 2021).

The Subscription Share Price was determined with reference to the prevailing market price of the Shares and was negotiated on an arm's length basis among the Company on one hand, and the Subscriber and the Manager on the other hand. After taking into consideration the reasons for the Subscription as stated in the section headed "Reasons for the Subscription and use of proceeds of the Subscription" in this joint announcement, the Directors consider that the Subscription Share Price and the terms and conditions of the Subscription Agreement are fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

Since the Company is incorporated in Hong Kong, the Subscription Shares have no nominal value.

- 4 -

Consideration

The Subscription Consideration shall be satisfied in the following manner at the Subscription Completion:

1. as to HK$235,152,555 to be paid in cash by the Subscriber; and
2. as to HK$235,152,555 by way of the issue of the Promissory Note by the Subscriber.

Details of the Promissory Note

Issuer	:	the Subscriber
Issue Date	:	on Subscription Completion
Principal Amount	:	HK$235,152,555
Interest	:	0%
Maturity	: 5 years from the date of issue
Early Repayment	: the Subscriber may prior to the maturity date pay all or any part
		of the outstanding principal amount

The terms of payment for the Subscription Consideration was determined after arm's length negotiation on a commercial basis.

Conditions of the Subscription

The Subscription Completion is conditional upon the fulfilment of the following conditions:

1. the Listing Committee granting the listing of and permission to deal in the Subscription
   Shares and such listing and permission not subsequently revoked prior to the delivery of definitive share certificate(s) representing the Subscription Shares; and
2. each party to the Subscription Agreement obtaining approval from its board of directors and all other necessary corporate and other actions to authorise the execution, delivery and performance of the Subscription Agreement and the transactions contemplated by the Subscription Agreement.

The Company shall use its reasonable endeavours to procure the fulfilment of the conditions to the Subscription Agreement as soon as is reasonably practicable.

The Company shall make an application to the Listing Committee for the listing of, and the permission to deal in, the Subscription Shares.

- 5 -