Lippo China Resources : ACQUISITION OF SUBSIDIARIES

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LIPPO CHINA RESOURCES LIMITED

力寶華潤有限公司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 156)

CONNECTED TRANSACTION

ACQUISITION OF SUBSIDIARIES

The Board wishes to announce that on 5 December 2019, the Company entered into the Sale and Purchase Agreement with Lippo, a Controlling Shareholder of the Company, whereby Lippo agreed to sell and the Company agreed to purchase, the entire interest in Lippo Finance for the consideration of HK$4,741,087.22. Lippo Finance's sole asset is its equity interest in Lippo Investments, a licensed corporation regulated under the SFO, which is wholly owned by Lippo Finance.

LISTING RULES IMPLICATION

Lippo is a Controlling Shareholder of the Company and is interested in approximately 74.99% of the total issued shares of the Company. Therefore, Lippo is a Connected Person of the Company and, accordingly, the entering into of the Sale and Purchase Agreement constitutes a connected transaction for the Company under Chapter 14A of the Listing Rules.

As one or more of the applicable percentage ratios (as defined in the Listing Rules) in respect of the entering into of the Sale and Purchase Agreement exceed 0.1% but all are less than 5%, and the transactions contemplated thereunder are in accordance with normal commercial terms, the entering into of the Sale and Purchase Agreement is exempt from the independent shareholders' approval requirement, but shall be subject to the relevant reporting and announcement requirements under Chapter 14A of the Listing Rules.

INTRODUCTION

The Board wishes to announce that on 5 December 2019, the Company entered into the Sale and Purchase Agreement with Lippo, a Controlling Shareholder of the Company, whereby Lippo agreed to sell and the Company agreed to purchase, the Sale Shares, representing the entire issued shares of Lippo Finance, and the Sale Loan. Lippo Finance's sole asset is its equity interest in Lippo Investments, a licensed corporation regulated under the SFO, which is wholly owned by Lippo Finance.

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Summarised below are the principal terms of the Sale and Purchase Agreement:

THE SALE AND PURCHASE AGREEMENT

Date:	5 December 2019
Parties:	Vendor: Lippo
	Purchaser: the Company
Subject matter:	(1) the Sale Shares, representing the entire issued shares of Lippo
	Finance; and
	(2) the Sale Loan, representing the entire shareholder's loans due
	from Lippo Finance to Lippo as at the date of the Sale and
	Purchase Agreement.
Consideration:	The aggregate consideration for the Sale Shares and the Sale Loan
	is HK$4,741,087.22 which was paid in cash by the Company to
	Lippo on Completion.
	The Consideration was negotiated and determined on an arm's
	length basis and on normal commercial terms with reference to the
	consolidated net asset value of Lippo Finance (including the
	shareholder's loans advanced by Lippo to Lippo Finance).
Completion:	Completion of the Sale and Purchase Agreement took place on the
	date of the Sale and Purchase Agreement.
Other terms:	On Completion, the Company, Lippo and Lippo Finance entered
	into the Deed of Assignment to assign the Sale Loan as
	contemplated under the Sale and Purchase Agreement.

Approval has been obtained from the SFC pursuant to section 132 of the SFO for the Company to become a new substantial shareholder (within the meaning under the SFO) of Lippo Investments.

REASONS FOR ENTERING INTO THE SALE AND PURCHASE AGREEMENT

Lippo Investments is the manager of the ETF, an exchange traded fund listed on the Stock Exchange, and the Company holds a majority equity interest in the ETF. The Board is of the view that the acquisition of Lippo Investments will streamline the structure of the Company's investment in and the management of the ETF.

In view of the above, the Board (including the independent non-executive directors) considers that the terms of the Sale and Purchase Agreement are fair and reasonable and in the interests of the Company and its shareholders as a whole.

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INFORMATION ON THE COMPANY, LIPPO, LIPPO FINANCE AND LIPPO INVESTMENTS

The principal business activity of the Company is investment holding. The principal business activities of the subsidiaries, associates, joint ventures and joint operation of the Company include investment holding, property investment, property development, food businesses, healthcare services, property management, mineral exploration and extraction, securities investment, treasury investment and money lending.

The principal business activity of Lippo is investment holding. The principal business activities of the subsidiaries, associates, joint ventures and joint operation of Lippo are investment holding, property investment, property development, food businesses, healthcare services, hotel operation, property management, project management, mineral exploration and extraction, fund management, securities investment, treasury investment, money lending, banking and other related financial services.

Lippo Finance is a wholly-owned subsidiary of Lippo. The principal business activity of Lippo Finance is investment holding. Set out below is the unaudited consolidated net loss of Lippo Finance for the years ended 31 March 2019 and 31 March 2018 respectively:

	For the year ended	For the year ended
	31 March 2019	31 March 2018
	HK$'000	HK$'000
Net loss before taxation	(3,672)	(4,557)
Net loss after taxation	(3,672)	(4,557)

The aggregate of the unaudited consolidated net asset value of Lippo Finance and the shareholder's loans advanced by Lippo to Lippo Finance as at 5 December 2019 is approximately HK$4,741,000.

Lippo Investments is a company incorporated in Hong Kong with limited liability and a wholly-owned subsidiary of Lippo Finance. Lippo Investments is a licensed corporation regulated under the SFO. Its principal business activity is fund management. In November 2009, Lippo Finance had acquired the entire interest in Lippo Investments for an aggregate consideration of HK$14,982,068 with reference to the then net asset value of Lippo Investments.

LISTING RULES IMPLICATION

Lippo is a Controlling Shareholder of the Company and is interested in approximately 74.99% of the total issued shares of the Company. Therefore, Lippo is a Connected Person of the Company and, accordingly, the entering into of the Sale and Purchase Agreement constitutes a connected transaction for the Company under Chapter 14A of the Listing Rules.

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As one or more of the applicable percentage ratios (as defined in the Listing Rules) in respect of the entering into of the Sale and Purchase Agreement exceed 0.1% but all are less than 5%, and the transactions contemplated thereunder are in accordance with normal commercial terms, the entering into of the Sale and Purchase Agreement is exempt from the independent shareholders' approval requirement, but shall be subject to the relevant reporting and announcement requirements under Chapter 14A of the Listing Rules.

As Dr. Stephen Riady, the Chairman and the Executive Director of the Company, is a Controlling Shareholder of Lippo, he is deemed to be materially interested in the Sale and Purchase Agreement. Accordingly, he was required to abstain from voting on the relevant Board resolution of the Company in respect of the Sale and Purchase Agreement. Save for the above, none of the Directors have a material interest in the transactions contemplated under the Sale and Purchase Agreement, and none of them were required to abstain or had abstained from voting on the relevant Board resolution of the Company to approve the Sale and Purchase Agreement.

DEFINITIONS

Unless the context otherwise require, the following expressions have the following meanings in this announcement:

"Board"	the board of directors of the Company;
"Company"	Lippo China Resources Limited 力寶 華 潤 有 限
	公司, a company incorporated in Hong Kong with
	limited liability whose shares are listed on the Stock
	Exchange and an approximately 74.99% indirect
	subsidiary of Lippo;
"Completion"	completion of the Sale and Purchase Agreement
	subject to and pursuant to the terms and conditions
	of the Sale and Purchase Agreement;
"Connected Person(s)"	has the meaning ascribed to such term under the
	Listing Rules;
"Consideration"	HK$4,741,087.22, being the consideration for the
	Sale Shares and the Sale Loan paid by the Company
	to Lippo pursuant to the Sale and Purchase
	Agreement;
"Controlling Shareholder"	has the meaning ascribed to such term under the
	Listing Rules;
"Deed of Assignment"	the deed of assignment entered into by the Company,
	Lippo and Lippo Finance at Completion to assign
	the Sale Loan which formed part of the Sale and
	Purchase Agreement;
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"ETF"	Lippo Select HK & Mainland Property ETF, an
	exchange traded fund listed on the Stock Exchange
	with the stock code: 2824;
"Hong Kong"	Hong Kong Special Administrative Region of the
	People's Republic of China;
"Lippo"	Lippo Limited 力 寶 有 限 公 司 , a company
	incorporated in Hong Kong with limited liability
	whose shares are listed on the Stock Exchange;
"Lippo Finance"	Lippo Finance Holdings Limited, a company
	incorporated in the British Virgin Islands with
	limited liability and a direct wholly-owned
	subsidiary of Lippo;
"Lippo Investments"	Lippo Investments Management Limited 力寶投資
	管理有限公司, a company incorporated in Hong
	Kong with limited liability and a direct wholly-
	owned subsidiary of Lippo Finance;
"Listing Rules" or "Rule"	Rules Governing the Listing of Securities on the
	Stock Exchange as amended or supplemented from
	time to time;
"Sale and Purchase Agreement"	the sale and purchase agreement dated 5 December
	2019 entered into by the Company and Lippo in
	respect of the sale and purchase of the Sale Shares
	and the assignment of the Sale Loan;
"Sale Loan"	the shareholder's loans owed by Lippo Finance to
	Lippo in the aggregate amount of approximately
	HK$85,368,000;
"Sale Shares"	50,000 ordinary shares, representing the entire
	issued shares of Lippo Finance;
"SFC"	Securities and Futures Commission;
"SFO"	Securities and Futures Ordinance (Chapter 571 of
	the Laws of Hong Kong);
"Stock Exchange"	The Stock Exchange of Hong Kong Limited;
"HK$"	Hong Kong dollar(s), the lawful currency of Hong
	Kong; and
"%"	per cent.
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By Order of the Board

LIPPO CHINA RESOURCES LIMITED

John Luen Wai Lee

Chief Executive Officer

Hong Kong, 5 December 2019

As at the date of this announcement, the Board of Directors of the Company comprises seven directors, of which Dr. Stephen Riady (Chairman), Messrs. John Luen Wai Lee (Chief Executive Officer) and James Siu Lung Lee as executive Directors, Mr. Leon Nim Leung Chan as non-executive Director and Messrs. Edwin Neo, King Fai Tsui and Victor Ha Kuk Yung as independent non-executive Directors.

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