TUS International : MAJOR TRANSACTION IN RELATION TO THE DISPOSAL OF 24.75% EQUITY INTEREST IN SUZHOU ZHIHUA AUTOMOBILE ELECTRONICS CO., LTD

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TUS INTERNATIONAL LIMITED

啟 迪 國 際 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 872)

MAJOR TRANSACTION

IN RELATION TO

THE DISPOSAL OF 24.75% EQUITY INTEREST IN

SUZHOU ZHIHUA AUTOMOBILE ELECTRONICS CO., LTD

THE DISPOSAL

After trading hours on 23 April 2021, the Vendor (an indirect wholly-owned subsidiary of the Company), the Purchasers, the Target Company and the Minority Shareholder entered into the Equity Transfer Agreement, pursuant to which the Vendor has conditionally agreed to sell, and the Purchasers have conditionally agreed to acquire, in aggregate 24.7538% of the equity interest in the Target Company at the Consideration of RMB136,145,600 (equivalent to approximately HK$162.0 million) in accordance with the terms and conditions of the Equity Transfer Agreement.

Pursuant to the Equity Transfer Agreement, Purchaser 1 and Purchaser 2 shall acquire 21.2175% and 3.5363% equity interest of the Target Company from the Vendor, respectively.

As at the date of this announcement, the Target Company is owned as to 44.7538% by the Vendor, which also has control of the board of directors of the Target Company. Upon completion, the Target Company will be owned as to 24.7538% by the Purchasers and 20% by the Vendor, and the Vendor will cease to have control of the board of directors of the Target Company. The Target Company will therefore cease to be a subsidiary of the Company upon completion.

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IMPLICATIONS UNDER THE LISTING RULES

As one or more of the applicable percentage ratios (as defined under the Listing Rules) in respect of the Disposal exceeds 25% and all of them are less than 75%, the Disposal constitutes a major transaction of the Company under Chapter 14 of the Listing Rules and is therefore subject to the reporting, announcement, circular and Shareholders' approval requirements under Chapter 14 of the Listing Rules.

EGM

The EGM will be convened and held for the purpose of considering and, if thought fit, approving the Equity Transfer Agreement and the transaction contemplated thereunder.

DESPATCH OF CIRCULAR

A circular containing, among other things, further details of the Equity Transfer Agreement and the Disposal, together with a notice of the EGM and a form of proxy, is expected to be despatched to the Shareholders on or before 31 May 2021, so as to allow sufficient time for the preparation of the relevant information to be included in the circular.

Completion of the Disposal is subject to the fulfilment of the conditions precedent set out in the Equity Transfer Agreement as well as Shareholders' approval and may or may not proceed. Shareholders and potential investors of the Company are advised to exercise caution when dealing in the Shares and other securities of the Company.

INTRODUCTION

After trading hours on 23 April 2021, the Vendor (an indirect wholly-owned subsidiary of the Company), the Purchasers, the Target Company and the Minority Shareholder entered into the Equity Transfer Agreement, pursuant to which the Vendor has conditionally agreed to sell, and the Purchasers have conditionally agreed to acquire, in aggregate 24.7538% of the equity interest in the Target Company at the Consideration of RMB136,145,600 (equivalent to approximately HK$162.0 million) in accordance with the terms and conditions of the Equity Transfer Agreement. Pursuant to the Equity Transfer Agreement, each of Purchaser 1 and Purchaser 2 shall acquire 21.2175% and 3.5363% equity interest of the Target Company from the Vendor, respectively.

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THE EQUITY TRANSFER AGREEMENT

The principal terms of the Equity Transfer Agreement are summarised below:

Date

23 April 2021

Parties

1. the Vendor;
2. the Purchasers;
3. the Target Company; and
4. the Minority Shareholder.

Assets to be disposed of

As at the date of this announcement, the Target Company, an indirect non-wholly owned subsidiary of the Company held through the Vendor, is owned as to 44.7538% by the Vendor, while the remaining shares are held by seven investors, including the Minority Shareholder holding 12.7003%. While the Company holds less than half of the voting rights of the Target Company, it has control over the Target Company by virtue of the Vendor's control of the board of directors and significant influence on the management and operation of the Target Company.

Upon completion, the Target Company will be owned as to 24.7538% by the Purchasers and 20% by the Vendor, and the Vendor will cease to have control of the board of the directors and significant influence on the management and operation of the Target Company. The Target Company will therefore cease to be an indirect non-wholly owned subsidiary of the Company upon completion.

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Consideration

Pursuant to the Equity Transfer Agreement, the Consideration of RMB136,145,600 (equivalent to approximately HK$162.0 million), shall be settled by the Purchasers in the following manner:

1. RMB116,696,229 in cash by Purchaser 1, shall be payable as to (i) RMB42,857,143 at the Initial Closing; and (ii) RMB73,839,086 at the Final Closing; and
2. RMB19,449,371 in cash by Purchaser 2, shall be payable as to (i) RMB7,142,857 at the Initial Closing; and (ii) RMB12,306,514 at the Final Closing.

Conditions precedent to the Initial Closing

The Initial Closing is conditional upon the satisfaction of certain conditions precedent, including but not limited to:

1. approval of the equity transfer under the Equity Transfer Agreement by the shareholders or partners of the Purchasers and the shareholders of the Vendor by way of resolutions;
2. other shareholders of the Target Company having waived their respective rights of first refusal to purchase the equity interest in the Target Company;
3. there being no existing or known legal proceedings or claims initiated by or to any government authority against the Target Group or the Vendor, which would prevent the performance of the Equity Transfer Agreement or would have material adverse effect on the Target Group;
4. no event that would lead to material adverse effect on the Target Group having occurred before or at the Initial Closing; and
5. completion of the due diligence on the Target Group by the Purchasers, and the results of the same being satisfactory to the Purchasers.

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If such conditions precedent to the Initial Closing are not fulfilled by 23 April 2021, the Purchasers may unilaterally decide to:

1. postpone the Initial Closing to a later date, which shall be no later than 30 April 2021; or
2. waive the unfulfilled condition(s) and, where practicable, proceed to the Initial Closing; or
3. if such conditions are not fulfilled and not waived by the Purchasers by 7 May 2021, the Purchasers may terminate the Equity Transfer Agreement, and shall not be liable to the other Parties for such decision, but such termination shall not affect any Party's liabilities to the other Parties for any breach of the Equity Transfer Agreement prior to termination.

Conditions precedent to the Final Closing

The Final Closing is conditional upon the satisfaction of certain conditions precedent, including but not limited to:

1. The Target Company having registered Purchaser 1 and Purchaser 2 as shareholders of the Target Company holding 21.2175% and 3.5363% equity interest respectively, and the same having been recorded in the register of shareholders of the Target Company in the manner agreed by the Parties;
2. all necessary consents from third parties, including relevant authorities concerning the Target Group, having been obtained;
3. all necessary approvals from relevant government authorities for the execution, performance and fulfilment of the Equity Transfer Agreement having been obtained, and such approvals still being valid and not having modified the provisions of the Equity Transfer Agreement in any material respect;
4. approval of the Disposal by the Shareholders;

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