Min Xin : DISCLOSEABLE TRANSACTION - CAPITAL CONTRIBUTION IN XIAMEN INTERNATIONAL BANK CO., LTD.

Microsoft Word - XIB Capital Increase Disclosable Transaction_E.docx

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MIN XIN HOLDINGS LIMITED

閩 信 集 團 有 限 公 司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 222)

DISCLOSEABLE TRANSACTION CAPITAL CONTRIBUTION IN XIAMEN INTERNATIONAL BANK CO., LTD. The Capital Contribution Agreement

On 21 June 2016 (after trading hours), the Company entered into the Capital Contribution Agreement with XIB, pursuant to which the Company agreed to conditionally subscribe for 140,000,000 XIB Shares (approximately 1.6694% of the issued share capital of XIB as enlarged by the issue of the XIB Shares) at the issue price of RMB4.8 (equivalent to approximately HK$5.66) per XIB Share. The consideration of the Capital Contribution is RMB672,000,000 (equivalent to approximately HK$792,724,800).

LISTING RULES IMPLICATIONS

As one of the applicable percentage ratios in respect of the Capital Contribution is more than 5% but less than 25%, the Capital Contribution constitutes a discloseable transaction of the Company and is therefore subject to the notification and announcement requirements under Chapter 14 of the Listing Rules.

WARNING COMPLETION OF THE CAPITAL CONTRIBUTION IS SUBJECT TO THE FULFILMENT OF THE CONDITIONS PRECEDENT TO THE CAPITAL CONTRIBUTION AGREEMENT WHICH ARE SET OUT IN THE PARAGRAPH HEADED "CONDITIONS PRECEDENT" OF THIS ANNOUNCEMENT. THE CAPITAL CONTRIBUTION THEREFORE MAY OR MAY NOT PROCEED. SHAREHOLDERS OF THE COMPANY AND POTENTIAL INVESTORS SHOULD EXERCISE CAUTION WHEN DEALING IN THE SECURITIES OF THE COMPANY.

Reference is made to the announcement of the Company dated 6 June 2016 in relation to the possible Capital Contribution in XIB.

THE CAPITAL CONTRIBUTION AGREEMENT

Date: 21 June 2016 Parties: (i) the Company

(ii) XIB

Interests to be acquired and Consideration

The current registered capital of XIB is RMB6,386,260,000. Pursuant to the Capital Contribution Agreement, the Company conditionally agreed to subscribe for 140,000,000 XIB Shares (approximately 1.6694% of the issued share capital of XIB as enlarged by the issue of the XIB Shares) at the issue price of RMB4.8 (equivalent to approximately HK$5.66) per XIB Share. The total amount of the consideration of the Capital Contribution is RMB672,000,000 (equivalent to approximately HK$792,724,800).

Subject to the fulfilment of the conditions precedent of the Capital Contribution Agreement, certain portion of the consideration of the Capital Contribution in the sum of RMB140,000,000 (equivalent to approximately HK$165,151,000) will be recognised as the registered capital of XIB, while the remaining portion of the consideration of the Capital Contribution in the sum of RMB532,000,000 (equivalent to approximately HK$627,573,800) will be recognised as the capital reserve of XIB. After the Capital Contribution, the equity interest of the Group in XIB will decrease to approximately 9.7635%.

Conditions precedent

The Capital Contribution is conditional upon the following:

1. the Company having performed such corporate acts as are necessary for the approval of the execution of the Capital Contribution Agreement and the performance of the Capital Contribution by the Company under the Capital Contribution Agreement;

2. upon execution of the Capital Contribution Agreement, XIB having taken such corporate acts as are necessary for the approval of the Company's subscription of XIB Shares and for the approval of such XIB Shares as are specifically subscribed by the Company;

3. based on such additionally issued XIB Shares and such amount of the additional registered capital as are reviewed and finally approved and determined by XIB and the relevant government and regulatory authorities, the additional registered capital issued to all new investors including the Company shall have been fully subscribed for, and the execution of capital contribution agreements between XIB and all new investors including the Company having been completed;

4. the Capital Contribution Agreement and all other legal documents which are necessary to be executed for the completion of the Capital Contribution and the subscription of XIB Shares by the Company having been duly executed; and

5. the relevant government and regulatory authorities (where necessary) having approved the Capital Contribution and the subscription of XIB Shares by the Company.

The parties agreed that they shall use their best endeavours to fulfil the conditions precedent set out above.

If due to the reasons of the Company, condition precedent (a) above is not fulfilled within 7 Business Days upon execution of the Capital Contribution Agreement, XIB shall have the right to terminate the Capital Contribution Agreement and the Company shall pay 10% of the consideration of the Capital Contribution to XIB as damages. As at the date of this announcement, condition precedent (a) above has been fulfilled.

In the event that the subscription of XIB Shares is not approved by XIB or the relevant government and regulatory authorities as provided under conditions precedent (b) and (e) above, the Capital Contribution Agreement shall terminate and no party shall be liable for breach against the other party in respect of the Capital Contribution Agreement.

The Capital Contribution was determined after arm's length negotiation between all new investors including the Company and XIB with reference to the funding needs of XIB, the net asset value per share of XIB under China Accounting Standards as at 31 December 2015 of approximately RMB3.97 (equivalent to approximately HK$4.68) and the market price-to-book ratio of other listed banks and city commercial banks in the PRC.

Payment

The consideration of the Capital Contribution shall be paid within 5 days after entering into the Capital Contribution Agreement. If the payment has not been made within 5 days, the Company shall be liable to pay 0.5% of the unpaid amount per day to XIB as penalty. If the payment has not been made within 30 days, XIB shall have the right to terminate the Capital Contribution Agreement and the Company shall pay 10% of the consideration of the Capital Contribution to XIB as damages.

In the event that (i) the Capital Contribution has not been approved by XIB or the relevant government and regulatory authorities; or (ii) conditions precedent (b) and (e) above has not been fulfilled before 30 June 2016, XIB shall have the right to terminate the Capital Contribution Agreement and the consideration of the Capital Contribution including the accrued interests (at the interest rate for current deposit published by XIB) shall be returned to the Company. In the event that XIB or the relevant government and regulatory authorities has only approved part of the Capital Contribution, the Company shall enter into a supplemental agreement with XIB within 7 Business Days to update the amount of Capital Contribution, otherwise XIB shall have the right to terminate the Capital Contribution Agreement. XIB shall return the excess amount of the consideration of the Capital Contribution including the accrued interests (at the interest rate for current deposit published by XIB) to the Company within 5 Business Days after entering into the aforesaid supplemental agreement.

In the event that the Capital Contribution Agreement is terminated, XIB shall return the consideration of the Capital Contribution including the accrued interests (at the interest rate for current deposit published by XIB) to the Company within 10 Business Days upon the termination of the Capital Contribution Agreement. If the Company has to pay any damages to XIB pursuant to relevant clauses of the Capital Contribution Agreement, such damages could be deducted from the consideration of the Capital Contribution to be returned to the Company.

The Company intends to finance the consideration of the Capital Contribution by way of internal and/or external resources. Subject to the completion of the Capital Contribution, the Company may raise funds through right issues. Further announcement in compliance with the Listing Rules in respect of the possible right issues will be made by the Company as and when appropriate.

REASONS FOR AND BENEFITS OF THE CAPITAL CONTRIBUTION

Based in Xiamen, XIB is the first sino-foreign joint venture bank established in the PRC. The Company held 36.75% interest in XIB immediately before the change of XIB from a sino-foreign joint venture bank to a Chinese city commercial bank, and from a limited liability company to a joint-stock limited company. In order to implement such restructuring of XIB and to comply with applicable laws and regulations of the PRC, the Company had disposed of 5% interest in XIB in 2011 and the Company's shareholding in XIB had been diluted from 31.75% to approximately 16.9333% at 31 January 2013. Furthermore, XIB had enlarged its share capital by issuing new shares to existing domestic investors and third parties on 26 August 2014 and 16 June 2015 respectively and the Company's shareholding in XIB had been further diluted to approximately 10.6289%.

XIB has experienced an even faster and greater development in its banking business after the completion of its restructuring. XIB has more than 50 branches and sub-branches located in Beijing, Shanghai, Fujian and Zhuhai. Luso International Bank, a subsidiary bank of XIB, has 13 branches in Macau and a Representative Office in Heng Qin, the PRC. XIB needs to further enlarge its capital base for its long-term business development and to meet the stringent regulatory requirements on capital adequacy ratio.