Singamas Container : VERY SUBSTANTIAL DISPOSAL IN RELATION TO THE DISPOSAL OF 100% EQUITY INTEREST IN TARGET COMPANIES

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 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 announcement.

勝 獅 貨 櫃 企 業 有 限 公 司

SINGAMAS CONTAINER HOLDINGS LIMITED

(Incorporated in Hong Kong with limited liability)

(Stock Code: 716)

VERY SUBSTANTIAL DISPOSAL

IN RELATION TO

THE DISPOSAL OF 100% EQUITY INTEREST IN TARGET COMPANIES

Joint Financial Advisers of the Company

THE DISPOSAL

The Board announces that on 6 May 2019, the Company, as the vendor, the Purchaser and the Target Companies, entered into the Agreement, pursuant to which, the Company conditionally agreed to sell and the Purchaser conditionally agreed to purchase the Sale Interests at a consideration of RMB 3,800 million in cash (subject to adjustments).

IMPLICATIONS UNDER THE LISTING RULES

As one or more of the relevant applicable percentage ratios set forth under Rule 14.07 of the Listing Rules in respect of the Disposal are 75% or more, the Disposal constitutes a very substantial disposal for the Company and is subject to the reporting, announcement and shareholders' approval requirements under Chapter 14 of the Listing Rules.

The EGM will be convened and held for the Shareholders to consider and, if thought fit, approve the Disposal, the Agreement and the transactions contemplated thereunder.

A circular containing, among other things, further information relating to the Disposal and the notice convening the EGM and other information as required under the Listing Rules is expected to be despatched to the Shareholders on or before 30 June 2019, as the Company expects that it will require more time to collate the financial information to be included in the circular.

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Closing of the Disposal is conditional upon the satisfaction (or, where applicable, waiver) of, among other things, the conditions set out in the section headed ''Conditions Precedent'' in this announcement, including the approval of the Agreement and the transactions contemplated thereunder by the Shareholders at the EGM and the Agreement not having been terminated. Accordingly, the Disposal may or may not proceed as contemplated or at all. Shareholders and potential investors are therefore advised to exercise caution when dealing in the securities of the Company.

THE DISPOSAL

The Board announces that on 6 May 2019, the Company, as the vendor, the Purchaser and the Target Companies, have entered into the Agreement, pursuant to which, the Company conditionally agreed to sell and the Purchaser conditionally agreed to purchase the Sale Interests.

The Agreement
Date	6 May 2019	(after trading hours)
Parties	(1)	Company (as vendor)
	(2)	The Purchaser (as purchaser)
	(3)	The Target Companies

As at the date of this announcement, to the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, the Purchaser and its ultimate beneficial owners are third parties independent of the Company and its connected persons.

(a) Asset to be disposed of

As at the date of this announcement, the Company directly or indirectly owns the Sale Interests, being 100% of the equity interest in each of the Target Companies. Pursuant to the Agreement, the Company conditionally agreed to sell and the Purchaser conditionally agreed to purchase the Sale Interests at the Consideration.

The Target Companies are engaged in the businesses including manufacturing of dry freight, specialised and refrigerated containers, provision of terminal services and provision of technical and development services of container manufacturing in the PRC.

(b) Consideration, payment terms and adjustments

Consideration

The Consideration as agreed between the Company and the Purchaser shall be RMB 3,800 million (equivalent to approximately US$565 million) in cash (subject to adjustments as set out in the Agreement, as described in the paragraph headed "Adjustments" below).

The Consideration was determined after arm's length negotiations between the Company and the Purchaser after taking into account the net asset value of the Target Companies, the business development and prospects of the Target Companies in the medium to long term and the reasons for and benefit of the Disposal as described below. In determining the basis of the Consideration, the Company has considered other valuation methodologies such as the income approach. However, given (i) the Group's past cyclical financial performance; (ii) the industry is subject to seasonal factors; and (iii) the Group's business is an asset intensive business, the Company considers the net asset value method a fairer and more reasonable approach in determining the Consideration. The Directors consider that the Consideration is fair and reasonable and in the interest of the Company and its Shareholders as a whole.

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Payment terms

The Consideration is payable in four instalments:

i.the first instalment of RMB 190 million ("First Instalment"), shall be paid into the third- party escrow account as jointly designated by the Company and Purchaser within 10 Business Days after the Agreement having become effective and the Agreement and the transactions contemplated thereunder having been approved by the Shareholders at the EGM. The First Instalment shall be released to the Company when the Second Instalment is paid, but may, subject to the written consent of the Company and the Purchaser, be released in advance to pay the taxes in connection with the transfer of the Sale Interests;

ii.the second instalment of RMB 2,280 million ("Second Instalment"), shall be paid within 10 Business Days (whichever is later): (a) upon the satisfaction of (or the waiver of) the Conditions Precedent; and (b) the Closing of each Target Company;

iii.the third instalment of RMB 1,030 million (and, subtracting the Profit or Loss of the Target Companies during the Transition Period and the Profit or Loss after Closing (where such figures are negative), or adding the Profit or Loss after Closing (where such figure is positive)) ("Third Instalment"), shall be paid to the Company within 10 Business Days after (whichever is later): (a) Target Companies having recovered its receivables prior to the Closing Date; (b) the Company having completed the tax declaration and payment in respect of the transfer of Sale Interests and the Company having provided evidence of such declaration and payment to the Purchaser; and (c) the Target Companies performed or complied with certain tasks or obligations in relation to certain matters identified during the due diligence process as agreed between the Company and the Purchaser as specified in the Agreement in respect of its business, environmental and intellectual property affairs; and

iv.the fourth instalment of RMB 300 million ("Fourth Instalment"), shall be paid at the same time as the payment of the Third Instalment. The Fourth Instalment shall be paid into a third- party escrow account as jointly designated by the Company and Purchaser as security deposit. The release of the Fourth Instalment shall be subject to certain conditions.

Adjustments

The Consideration is subject to adjustments as a result of (i) the Profit or Loss of the Target Companies during the Transition Period, (ii) the Profit or Loss after Closing and (iii) SASAC filing.

(i)The Profit or Loss of the Target Companies during the Transition Period

The Agreement contains customary pre-closing obligations on the Company requiring the Target Companies to be operated in the ordinary course during the Transition Period. The Company and the Purchaser agree that the profit or loss arising from the Target Companies during the Transition Period shall belong to or be borne by the Company ("Profit or Loss of the Target Companies"). After the Transitional Period Assessment Date, the financial conditions of the Target Companies shall be audited as of the Transitional Period Assessment Date in accordance with the PRC accounting standards and an audit report shall be issued accordingly, based on which the Profit or Loss of the Target Companies shall be determined. If the Company expects that the figure of the Profit or Loss of the Target Companies to be positive, the Company shall submit to the Purchaser in writing to confirm the amount and complete the profit distribution of such amount after the satisfaction (or waiver) of the Conditions Precedent but before the Closing Date.

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As at the date of this announcement, the Company does not contemplate any material change or impact on the operations of the Target Companies during the Transitional Period. Given that the Transition Period will cover a certain period of time up to or around Closing, based on the information currently available to the Company as at the date of this announcement, the Company is not in a position to quantify any material downward adjustment on the Consideration pursuant to adjustment event (i) above.

(ii)The Profit and Loss after Closing

It is a commercial agreement between the Company and the Purchaser under the Agreement to not accept production orders beyond the designated amount in order to ensure the Target Companies will operate generally in line with their respective past performance and will not accept orders beyond their respective production capabilities. The Company undertakes that, as of the Closing Date, the total amount of the production orders which have not been manufactured of the Target Companies shall not exceed the designated amount under the Agreement and the raw material inventory shall not exceed the number corresponding to the remaining production orders of the Target Companies. The profit or loss arising from the above-mentioned production orders not exceeding such designated amount shall belong to or be borne by both the Purchaser and the Company equally. For the portion of production orders beyond such designated amount, the loss (if any) shall be borne by the Company and the profit (if any) shall be attributable to the Purchaser (together with the profit or loss belong to or be borne by both the Purchaser and Company equally, the "Profit or Loss after Closing"). The Profit or Loss after Closing shall be determined in accordance with the audit result.

Given that the Transition Period will cover a certain period of time up to or around Closing, based on the information currently available to the Company as at the date of this announcement, the Company is not aware of any material downward adjustment on the Consideration pursuant to adjustment event (ii) above.

(iii)SASAC filing

If the valuation of the Target Companies filed with and confirmed by the competent department of SASAC is lower than the Consideration (before any adjustments in accordance with the Agreement), the Consideration shall be adjusted accordingly based on the filing of the competent department of SASAC. However, if such adjusted amount is lower than RMB 3,500 million, the Company has the right to terminate the Agreement in accordance with the terms of the Agreement.

As at the date of this announcement, the Company is not in a position to provide a reliable and meaningful assessment on the relevant amount of potential downward adjustment to the Consideration pursuant to adjustment event (iii) above. As at the date of this announcement, on the basis of the prevailing circumstances, the Company contemplates that it will terminate the Agreement in accordance with the terms of the Agreement if the adjusted amount of the Consideration based on the valuation of the Target Companies is lower than RMB 3,500 million. In the event the Company considers to proceed with the Disposal if the adjusted amount of the Consideration based on the valuation of the Target Companies is lower than RMB 3,500 million, the Company will seek the approval of the Shareholders (where applicable).

(c) Conditions Precedent

Closing is subject to the satisfaction of (or, where applicable, the waiver by the Purchaser), among others, the following conditions:

i.the Agreement having become effective;

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ii.the Purchaser having made its filings with the competent department of SASAC;

iii.the Agreement and the transactions contemplated thereunder having been approved by the Shareholders at the EGM and the "No Comment Letter" has been issued by the Stock Exchange with respect to the circular in respect of the Agreement or the transactions contemplated thereunder;

iv.the Purchaser having completed all necessary antitrust/merger control filings or declarations required by any jurisdiction for the transfer of the Sale Interests contemplated under the Agreement (if applicable), and all appropriate waiting periods (including any extensions thereof) have expired or terminated and the relevant authorities have granted (or deemed to have been granted in accordance with applicable law) all licenses or approvals. If such licenses or approvals impose any additional conditions, the Purchaser may opt to accept such conditions or terminate the Agreement;

v.the representations and warranties by the Company and Target Companies are true, accurate and complete, and all undertakings by each of them before Closing has been completed;

vi.the transfer of the Sale Interests contemplated under the Agreement is not prohibited by any applicable laws, regulations, departmental rules, Listing Rules or prohibitions, and there are no circumstances of non-compliance with applicable laws, regulations, departmental rules, Listing Rules or prohibitions;

vii.the Target Companies, the Company and its related parties (including but not limited to the controlling shareholder of the Company) having notified the relevant parties and obtained their consent(s) in accordance with the relevant contracts; and

viii.the Target Companies performed or complied with certain pre-completion tasks or obligations in relation to certain matters identified during the due diligence process as agreed between the Company and the Purchaser as specified in the Agreement in respect of, among others, its business, contractual, financial, accounting, taxation, governmental filing, approval and consents, land, equipment, employment and intellectual property affairs.

The Purchaser shall not waive conditions (i), (iii), (vi) and (vii) above without the prior consent of the Company. As at the date of this announcement, the Company does not contemplate any material financial impact as a result of the performance of and compliance with such pre-completion tasks or obligations referred to in condition (viii) above.

(d) Closing

The Company and the Target Companies shall, in good faith, cause the Closing to occur expediently. The latest date on which the Closing could occur, in principle, should be no later than 30 September 2019. If the Company fails to obtain (i) the "No Comment Letter" issued by the Stock Exchange with respect to the circular in relation to the Agreement and the transactions contemplated thereunder; or (ii) the approval of the Agreement and the transactions contemplated thereunder by the Shareholders at the EGM before 31 December 2019, either party has the right to terminate the Agreement in accordance with the Agreement. If the Company fails to satisfy the Conditions Precedent (other than those waived by the Purchaser and the Conditions Precedent relating to the obtaining of the above- mentioned "No Comment Letter" issued by the Stock Exchange or the EGM approval) by 30 September 2019, the Purchaser has the right to terminate the Agreement in accordance with the Agreement.

If the Closing fails to occur by 30 September 2019 due to matters in relation to antitrust/merger control filings, the latest date on which the Closing could occur shall be extended to 31 December 2019. If any extension beyond such date is required, the Purchaser and the Company shall negotiate on the further extension. If the parties fail to agree on such further extension or the Closing fails to

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