Sun Hung Kai : Voluntary Announcement - Formation of a Joint Venture Company for Acquisition of a Company holding a Property in London

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.

(incorporated in Hong Kong with limited liability)

(Stock Code: 86)

VOLUNTARY ANNOUNCEMENT

FORMATION OF A JOINT VENTURE COMPANY FOR

ACQUISITION OF A COMPANY HOLDING A PROPERTY IN LONDON

On 10 December 2019 (after trading hours), SHK Strategic Capital (an indirect wholly-owned subsidiary of SHK) entered into the Shareholders Agreement with Macquarie and DPK for the formation of the JV Company for the purpose of the acquisition of the Sale Shares through the Buyer (an indirect wholly-owned subsidiary of the JV Company). The JV Company is owned as to 47.5% by SHK Strategic Capital, 47.5% by Macquarie and 5% by DPK.

On 10 December 2019 (after trading hours), the Buyer entered into the Share Purchase Agreement with the Seller pursuant to which the Buyer has conditionally agreed to acquire and the Seller has conditionally agreed to sell the Sale Shares, representing all of the issued ordinary share(s) of the Target Company, at the Consideration. As at the date of the Share Purchase Agreement, the Target Company directly holds the Property.

On 10 December 2019 (after trading hours), SHK Strategic Capital (an indirect wholly-owned subsidiary of SHK) entered into the Shareholders Agreement with Macquarie and DPK for the formation of the JV Company for the purpose of the acquisition of the Sale Shares through the Buyer (an indirect wholly-owned subsidiary of the JV Company). The JV Company is owned as to 47.5% by SHK Strategic Capital, 47.5% by Macquarie and 5% by DPK.

On 10 December 2019 (after trading hours), the Buyer entered into the Share Purchase Agreement with the Seller pursuant to which the Buyer has conditionally agreed to acquire and the Seller has conditionally agreed to sell the Sale Shares, representing all of the issued ordinary share(s) of the Target Company, at the Consideration. As at the date of the Share Purchase Agreement, the Target Company directly holds the Property.

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THE SHAREHOLDERS AGREEMENT

The principal terms of the Shareholders Agreement are as follows:

Date:	10 December 2019
Parties and	(i)	SHK Strategic Capital (47.5%)
shareholding ratio:
	(ii)	Macquarie (47.5%)
	(iii)	DPK (5%)

THE SHARE PURCHASE AGREEMENT

The principal terms of the Share Purchase Agreement are as follows:

Date:	10 December 2019
Parties:	(i)	HNA International Property Investment Company Two
		Limited as the Seller; and
	(ii)	Isabella Properties Limited as the Buyer.
Asset to be acquired

Pursuant to the Share Purchase Agreement, the Buyer has conditionally agreed to acquire, and the Seller has conditionally agreed to sell, the Sale Shares, representing all of the issued ordinary share(s) of the Target Company, which is the sole legal and beneficial owner of the Property. The Property is situated at Building B-4, and its extension Building B-4A, 17 Columbus Courtyard, Canary Wharf, London, E14 4DA, United Kingdom.

Consideration

The Consideration to be paid for the Sale Shares shall be a sum equal to the Agreed Consideration, which shall be paid by the Buyer on the Completion Date.

In addition, at Completion, the Buyer is required to procure (by putting the Target Company in funds) the repayment by the Target Company of the Existing Bank Debt, unless the Buyer (with the requisite lender's consent) elects to rollover the Existing Bank Debt.

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Conditions precedent

Completion is conditional upon:

1. CWT's shareholders approving the transaction contemplated under the Share Purchase Agreement, either by passing the ordinary resolution(s) at an extraordinary general meeting of CWT; or CWT obtaining written approval(s) (in the agreed form) from a shareholder of CWT or closely allied group of shareholders of CWT who together hold more than 50% of the voting rights at a general meeting of CWT; and
2. the lender to the Target Company having provided its written consent to the implementation of the Restructuring.

Completion and Termination

Completion shall take place on the Completion Date. If the Conditions are not satisfied or waived on or before 17 February 2020, or such later date as may be agreed in writing between the parties, the Share Purchase Agreement shall terminate with immediate effect automatically.

REASONS FOR AND BENEFITS OF THE TRANSACTION

The terms of the Shareholders Agreement were arrived at after arm's length negotiations between SHK Strategic Capital, Macquarie and DPK, and the terms of the Share Purchase Agreement were arrived at after arm's length negotiations between the Seller and the Buyer, both having taken into account (i) the valuation of the Property by an independent professional valuer; and (ii) the net asset value of the Target Company.

The SHK Board considers that it is beneficial for SHK Group to seek suitable investment opportunities from time to time to strengthen and diversify its investment portfolio. Having considered the nature of the Property, the SHK Board considers that investment in the Property is conducive to the further development of SHK Group's business.

In view of the above, the SHK Board is of the view that the terms of the Shareholders Agreement and the Share Purchase Agreement are on normal commercial terms and the Transaction is fair and reasonable, and in the interests of SHK and its shareholders taken as a whole.

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DEFINITIONS

In this announcement, the following expressions have the meanings set out below unless the context requires otherwise:

"Agreed Consideration"	the Property Price less the Existing Bank Debt;
"Buyer"	Isabella Properties Limited, a company incorporated under
	the laws of England and Wales with limited liability, which
	is indirectly wholly-owned by the JV Company;
"Completion"	completion of the sale and purchase of the Sale Shares in
	accordance with the provisions of the Share Purchase
	Agreement;
"Completion Date"	a date which is the tenth business day after the date on which
	the conditions precedent set out in the Share Purchase
	Agreement are satisfied or (if applicable) waived in writing,
	or such other date as agreed by the Seller and the Buyer;
"Conditions"	the conditions set out under the paragraph headed
	"Conditions precedent" of this announcement;
"Consideration"	the consideration to be paid for the Sale Shares which shall
	be a sum equal to the Agreed Consideration;
"CWT"	CWT International Limited, a company incorporated in
	Hong Kong with limited liability, the shares of which are
	listed on the main board of the Stock Exchange (Stock Code:
	521);
"DPK"	DPK Quay Limited, a company incorporated under the laws
	of England and Wales with limited liability;
"Existing Bank Debt"	aggregate amount of all principal and interest, termination
	or early repayment fees, break fees, hedging break costs,
	and other costs due on the Completion Date under certain
	finance documents to which the Target Company is a party,
	which is expected to be approximately £75,000,000;

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"HK$"	Hong Kong dollars, the lawful currency of Hong Kong;
"Hong Kong"	Hong Kong Special Administrative Region of the People's
	Republic of China;
"JV Company"	Isabella Properties Holdings Limited, a joint venture
	company incorporated under the laws of England and Wales
	with limited liability;
"Macquarie"	Macquarie European Investment Holdings Limited, a
	limited liability company incorporated under the laws of
	England and Wales;
"Property"	Building B-4, 17 Columbus Courtyard, Canary Wharf,
	London E14 4DA and Building B-4A, an extension to 17
	Columbus Courtyard, Canary Wharf, London E14 4DA,
	United Kingdom as registered at the land registry under title
	number EGL382798, known as the CS Building;
"Property Price"	£110,200,000	(equivalent	to	approximately
	HK$1,134,000,000);
"Restructuring"	the restructuring of part of the principal and interest due and
	owing by the Target Company to the Seller in respect of
	shareholder debt by way of a new subscription for shares in
	the Target Company by the Seller and a set-off of such
	amounts against the subscription price payable for those
	shares;
"Sale Shares"	all of the issued ordinary share(s) of the Target Company
	which is, at the date of the Share Purchase Agreement, one
	ordinary share (no par value share) and as may be varied
	after the date of	the Share Purchase Agreement (as to

number, class and/or par value) in accordance with the Restructuring;

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"Seller"	HNA International Property Investment Company Two
	Limited, a company incorporated under the laws of the
	British Virgin Islands with limited liability, which is
	indirectly wholly-owned by CWT;
"Share Purchase Agreement"	the conditional share purchase agreement in respect of the
	sale and purchase of all the issued ordinary share(s) of the
	Target Company dated 10 December 2019 and entered into
	by the Seller and the Buyer;
"Shareholders Agreement"	The shareholders agreement of the JV Company dated
	10 December 2019 entered into between SHK Strategic
	Capital, Macquarie and DPK;
"SHK"	Sun Hung Kai & Co. Limited, a company incorporated in
	Hong Kong with limited liability, the securities of which are
	listed on the main board of the Stock Exchange (Stock Code:
	86);
"SHK Board"	the board of directors of SHK;
"SHK Group"	SHK and its subsidiaries;
"SHK Strategic Capital"	Sun Hung Kai Strategic Capital Limited, a company
	incorporated in Hong Kong with limited liability, which is
	indirectly wholly-owned by SHK;
"Stock Exchange"	The Stock Exchange of Hong Kong Limited;
"Target Company"	HNA International Property Investment Company Three
	Limited, a company incorporated under the laws of the
	British Virgin Islands with limited liability, which is
	directly wholly-owned by the Seller before Completion;
"Transaction"	the transaction contemplated under the Shareholders
	Agreement and the Share Purchase Agreement;

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"£"	Pounds sterling, the lawful currency of the United Kingdom
	of Great Britain and Northern Ireland; and
"%"	per cent.

For the purpose of illustration only and unless otherwise stated, the exchange rate adopted in this announcement is £1 = HK$10.29. Such conversion should not be construed as a representation that any amount has been, could have been, or may be, exchanged at this or any other rate.

On behalf of the SHK Board

Sun Hung Kai & Co. Limited

Simon Chow Wing Charn

Executive Director

Hong Kong, 11 December 2019

As at the date of this announcement, the SHK Board comprises Messrs. Lee Seng Huang (Group Executive Chairman) and Simon Chow Wing Charn being the Executive Directors; Messrs. Peter Anthony Curry and Jonathan Andrew Cimino being the Non-Executive Directors; and Mr. Evan Au Yang Chi Chun, Mr. David Craig Bartlett, Mr. Alan Stephen Jones and Ms. Jacqueline Alee Leung being the Independent Non-Executive Directors.

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