Suncity : DISCLOSEABLE AND CONNECTED TRANSACTION IN…

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SUNCITY GROUP HOLDINGS LIMITED

太陽城集團控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1383) DISCLOSEABLE AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF THE ENTIRE EQUITY INTEREST IN AND SHAREHOLDER'S LOAN OWED BY STAR ADMIRAL LIMITED INVOLVING ISSUE OF CONVERTIBLE BONDS UNDER SPECIFIC MANDATE THE ACQUISITION

The Board is pleased to announce that, after trading hours of the Stock Exchange on 27 July 2017, the Purchaser (a direct wholly-owned subsidiary of the Company), the Vendor and the Guarantor entered into the Acquisition Agreement, pursuant to which, among other things, the Purchaser conditionally agreed to acquire, and the Vendor conditionally agreed to sell, (i) the Sale Shares, which represent the entire equity interest of the Target; and (ii) the Sale Loan, which represents the shareholder's loan owed by the Target, at the aggregate Consideration of HK$600 million, which shall be satisfied by the issue of the Promissory Note and Convertible Bonds by the Company in the principal amount of HK$303 million and HK$297 million, respectively, to the Vendor (or as it may direct in writing) at Completion. The Target indirectly owns approximately 34% effective interest in the ProjectCo, and the ProjectCo is currently developing an integrated resort project located in Hoi An, Vietnam consisting of a casino, hotels, residential areas, and a golf course.

Completion is subject to fulfilment or waiver (as the case may be) of certain conditions precedent as set out in the paragraph headed "Conditions precedent" under the section headed "The Acquisition Agreement" in this announcement.

Upon Completion, the Target will become an indirect wholly-owned subsidiary of the Company whereas GYE, Singapore HoldCo, Hoi An South Development (HK) Limited, Yield Gold Enterprises (Macao) Limited and ProjectCo will become joint ventures of the Group. Accordingly, the financial results of the Target will be consolidated into, and the financial results of GYE, Singapore HoldCo, Hoi An South Development (HK) Limited, Yield Gold Enterprises (Macao) Limited and ProjectCo will be accounted for using equity method in, the consolidated financial statements of the Group.

LISTING RULES IMPLICATIONS

As some of the applicable percentage ratios in respect of the Acquisition are more than 5% but less than 25%, the Acquisition constitutes a discloseable transaction of the Company and is therefore subject to reporting and announcement requirements pursuant to Chapter 14 of the Listing Rules.

The Vendor is wholly owned by Mr. Chau, an executive Director and the Chairman of the Company. Fame Select, a company which is owned as to 50% by Mr. Chau, is interested in approximately 72.17% of the issued share capital of the Company as at the date of this announcement and is therefore the controlling shareholder of the Company. Accordingly, the Vendor is regarded as a connected person of the Company under Chapter 14A of the Listing Rules and the transactions contemplated under the Acquisition Agreement constitute a connected transaction of the Company under Chapter 14A of the Listing Rules, and is subject to reporting, announcement and the independent shareholders' approval requirements under Chapter 14A of the Listing Rules.

As disclosed in the announcement of the Company dated 22 June 2017, Mr. Chau agreed to procure the Vendor to pay Mr. Lo, an executive Director, a certain percentage of the realised profit of the Vendor upon realisation or disposal of its interests in the Project subject to a maximum amount of HK$120 million as consideration for Mr. Lo's advisory and consultancy service to Mr. Chau in respect of the Project. By virtue of interests of Mr. Chau and Mr. Lo in the Acquisition Agreement, Mr. Chau, Mr. Lo and their respective associates shall abstain from voting on the ordinary resolution in relation to the Acquisition Agreement and the transactions contemplated thereunder to be proposed at the EGM. As at the date of this announcement, Mr. Chau and his associates are interested in 4,345,489,489 Shares, representing approximately 72.17% of the issued share capital of the Company, and Mr. Lo is not interested in any Shares. Save for the aforesaid, to the best of the Directors' knowledge, information and belief and having made all reasonable enquiries, no other Shareholders are required to abstain from voting at the EGM in respect of the Acquisition Agreement and the transactions contemplated thereunder. By virtue of interests of Mr. Chau and Mr. Lo in the Acquisition Agreement, they had abstained from voting in respect of the relevant board resolution relating to the Acquisition Agreement and the transactions contemplated thereunder. Save for the aforesaid, no other Directors have a material interest in the Acquisition Agreement and were required to abstain from voting on the Board resolution approving the Acquisition Agreement and the transactions contemplated thereunder.

The Independent Board Committee, comprising all of the independent non-executive Directors, has been established to advise and provide recommendation to the Independent Shareholders on the voting in respect of the transactions contemplated under the Acquisition Agreement. In this connection, the Company will appoint the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders as to whether the terms of the Acquisition Agreement are fair and reasonable so far as the Company and the Independent Shareholders are concerned and the entering into the Acquisition Agreement is in the interests of the Company and the Shareholders as a whole, and to advise the Independent Shareholders on the voting in respect of the transactions contemplated under the Acquisition Agreement.

The EGM will be held and convened for considering, and if thought fit, approving the Acquisition Agreement and the transactions contemplated thereunder. A circular containing, among other things, (i) details of the Acquisition Agreement and the transactions contemplated thereunder; (ii) further information of the Group and the Target Group, as well as the Project; (iii) the recommendation from the Independent Board Committee to the Independent Shareholders in relation to the Acquisition Agreement and the transactions contemplated thereunder; (iv) a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders regarding the Acquisition Agreement and the transactions contemplated thereunder; and (v) a notice of the EGM, is expected to be despatched to the Shareholders on or before 25 August 2017, as additional time is required by the Company for the preparation of certain information for inclusion in the circular.

Completion is conditional upon the fulfillment or waiver (as the case may be) of the conditions precedent as set out in the paragraph headed "Conditions precedent" under the section headed "The Acquisition Agreement" in this announcement. Accordingly, the Acquisition may or may not proceed. Shareholders and potential investors of the Company should exercise caution when dealing in the securities of the Company and are recommended to consult their professional advisers if they are in any doubt about their position and as to the actions that they should take. The Company confirms that, based on Vietnam legal advice obtained by the Company, the Project is lawful in Vietnam. The Company has also been advised that the Project and the transactions contemplated thereunder conducted in Vietnam do not contravene the Gambling Ordinance (Cap. 148 of the Laws of Hong Kong). Shareholders and potential investors of the Company should note that, pursuant to Guidance Letter HKEx- GL71- 14 issued by the Stock Exchange, the Stock Exchange may direct the Company to take remedial actions and/or may suspend dealings in, or may cancel the listing of, the Company's securities pursuant to Rule 6.01 of the Listing Rules if the operation of the proposed Project fails to comply with applicable laws in Vietnam and/or contravenes the Gambling Ordinance (Cap. 148 of the Laws of Hong Kong). INTRODUCTION

Reference is made to the announcement of the Company dated 22 June 2017 in relation to, among other things, the entering into of the memorandum of understanding between the Purchaser (a direct wholly-owned subsidiary of the Company) and the Vendor in relation to the possible acquisition of the entire equity interest in and shareholder's loan owed by the Target.

The Board is pleased to announce that, after trading hours of the Stock Exchange on 27 July 2017, the Purchaser, the Vendor and the Guarantor entered into the Acquisition Agreement, pursuant to which, among other things, the Purchaser conditionally agreed to acquire, and the Vendor conditionally agreed to sell, (i) the Sale Shares, which represents the entire equity interest of the Target; and (ii) the Sale Loan, which represents the shareholder's loan owed by the Target, at the aggregate Consideration of HK$600 million, which shall be satisfied by the issue of Promissory Note and Convertible Bonds by the Company in the principal amount of HK$303 million and HK$297 million, respectively, to the Vendor (or as it may direct in writing) at Completion. Principal terms of the Acquisition Agreement are set out below.

THE ACQUISITION AGREEMENT Date

27 July 2017

Parties

Purchaser: Goal Summit Limited, a direct wholly-owned subsidiary of the Company; Vendor: Suncity International Holdings Limited; and

Guarantor: Mr. Chau who guarantees the performance of the Vendor's obligations under the Acquisition Agreement.

The Vendor is a company incorporated in the BVI with limited liability and is principally engaged in investment holding.

The Vendor is wholly owned by the Mr. Chau, an executive Director and the Chairman of the Company. Fame Select is the controlling shareholder of the Company and is owned as to 50% by Mr. Chau. The Vendor is therefore regarded as a connected person of the Company under Chapter 14A of the Listing Rules.