Top Spring International : Announcement - Very Substantial Disposal in Relation to the Disposal of the Target Companies

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TOP SPRING INTERNATIONAL HOLDINGS LIMITED

萊蒙國際集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 03688) VERY SUBSTANTIAL DISPOSAL IN RELATION TO THE DISPOSAL OF THE TARGET COMPANIES THE SALE AND PURCHASE AGREEMENT

On 15 August 2017 (after trading hours), the Company entered into the Sale and Purchase Agreement with H-Change, pursuant to which (i) the Company (or its designated companies) conditionally agreed to sell, and H-Change (or its designated companies) conditionally agreed to purchase, the Sale Shares in the Target Companies; and (ii) H-Change (or its designated companies) shall settle the Intercompany Loans.

The Sale Shares represent (i) the entire equity interest in Tai Xiang owned by Prosperous Properties Holdings; (ii) 79% equity interest in Changzhou Top Spring owned by Prosperous Property Development; (iii) 25% equity interest in Shenzhen Water Flower owned by Xiang Kang; and (iv) 19% equity interest in Nanchang Top Spring owned by Top Spring Insite. The Target Companies, directly or indirectly, own eight property projects at various stages of development in six cities in the PRC with a total estimated net saleable/leasable GFA of approximately 1,970,000 sq.m.

Subject to adjustments, the aggregate value of the Consideration and the Intercompany Loans shall be RMB13,325,903,636 (equivalent to approximately HK$15,324,789,000), comprising (i) the aggregate value of the Consideration in the amount of RMB10,672,084,432 (equivalent to approximately HK$12,272,897,000); and (ii) the aggregate value of the Intercompany Loans in the amount of RMB2,653,819,204 (equivalent to approximately HK$3,051,892,000).

Upon the Completion, each of the Target Companies will cease to be a subsidiary of the Company and the financial results of the Target Companies Group will no longer be consolidated into the consolidated financial statements of the Company.

IMPLICATIONS UNDER THE LISTING RULES

As the relevant percentage ratio(s) under the Listing Rules in respect of the transactions contemplated under the Sale and Purchase Agreement exceeds 75%, the entering into of the Sale and Purchase Agreement constitutes a very substantial disposal of the Company under the Listing Rules. Therefore, the Sale and Purchase Agreement and the transactions contemplated under it are subject to the notification, announcement and shareholders' approval requirements under Chapter 14 of the Listing Rules.

THE EGM

The EGM will be convened as soon as practicable at which ordinary resolution(s) will be proposed for the Shareholders to consider and, if thought fit, to approve the Sale and Purchase Agreement and the transactions contemplated under it.

DESPATCH OF THE CIRCULAR

The Circular containing, among other things, (i) further details about the Sale and Purchase Agreement and the transactions contemplated under it; and (ii) a notice of the EGM and a proxy form for the EGM, is expected to be despatched to the Shareholders on or before 26 October 2017 so as to allow sufficient time for the preparation of the relevant information for inclusion in the Circular.

The transactions contemplated under the Sale and Purchase Agreement may or may not proceed. Shareholders and potential investors of the Company should exercise caution when dealing in the Shares. THE SALE AND PURCHASE AGREEMENT

The principal terms of the Sale and Purchase Agreement are set out below:

1. Date

   15 August 2017 (after trading hours)

2. Parties

3. the Company

4. H-Change

   To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, H-Change and its ultimate beneficial owners are Independent Third Parties of the Company.

5. Subject Matter

   Pursuant to the Sale and Purchase Agreement, (i) the Company (or its designated companies) conditionally agreed to sell, and H-Change (or its designated companies) conditionally agreed to purchase, the Sale Shares in the Target Companies; and (ii) H-Change (or its designated companies) shall settle the Intercompany Loans.

   The Sale Shares represent (i) the entire equity interest in Tai Xiang owned by Prosperous Properties Holdings; (ii) 79% equity interest in Changzhou Top Spring owned by Prosperous Property Development; (iii) 25% equity interest in Shenzhen Water Flower owned by Xiang Kang; and (iv) 19% equity interest in Nanchang Top Spring owned by Top Spring Insite.

   As at the date of the Sale and Purchase Agreement, the remaining 21% equity interest in Changzhou Top Spring, the remaining 75% equity interest in Shenzhen Water Flower and 51% equity interest in Nanchang Top Spring are indirectly owned by Tai Xiang. Such equity interests will be sold to H-Change (or its designated companies) through the sale of the entire equity interest in Tai Xiang pursuant to the Sale and Purchase Agreement.

   The Target Companies, directly or indirectly, own a total of eight property projects (excluding the Excluded Properties) in six cities in the PRC with details as follows:

   Target Company Number of property projects owned Location of property projects owned Estimated total net saleable/ leasable GFA attributable by property projects owned

   (sq.m.)

   Tai Xiang 3

   Shenzhen,

   Hangzhou 287,000

   Changzhou Top Spring 2

   Changzhou,

   Nanjing 172,000

   Shenzhen Water Flower 2

   Shenzhen,

   Guangzhou 1,139,000

   Nanchang Top Spring 1 Nanchang 372,000

   Total 8 1,970,000

   The following Excluded Properties owned by the Target Companies Group as at the date of the Sale and Purchase Agreement will be transferred out of the Target Companies Group and will not be the subject matter under the Sale and Purchase Agreement:

6. the shops with total GFA of approximately 25,748 sq.m. owned by Shenzhen Water Flower located at Phases 1-3 of The Spring Land (水榭春天) in Longhua District, Shenzhen;

7. the car parking spaces located at The Spring Land (水榭春天) in Longhua District, Shenzhen and the car parking spaces of the club house of Shenzhen Hidden Valley (深圳水榭山) owned by Shenzhen Water Flower;

8. the car parking spaces of Hu Jing Garden (湖景花園), Xin Tuo Garden (信托花園) and Ju Long Ju (聚龍居), the shops with total GFA of approximately 315 sq.m. at B1 of Hu Qing Court and the top floor of Hu Jing Court with total GFA of approximately 82 sq.m. located in Shenzhen indirectly owned by Tai Xiang;

9. the four villas and the club house of Shenzhen Hidden Valley (深圳水榭山) owned by Shenzhen Water Flower;

10. the shops with total GFA of approximately 4,992 sq.m. indirectly owned by Tai Xiang located at Xiangmei Road, Futian District, Shenzhen; and

11. the car parking spaces of Shenzhen Water Flower Garden (深圳水榭花都), the recreational centre with total GFA of approximately 1,916 sq.m. and the green overhead storey with total GFA of approximately 2,423 sq.m. of Shenzhen Water Flower Garden Phase I (深圳水榭花都一期) indirectly owned by Tai Xiang.

12. Consideration and the Intercompany Loans

Subject to adjustments, (i) the aggregate value of the Consideration shall be RMB10,672,084,432 (equivalent to approximately HK$12,272,897,000); and (ii) the aggregate value of the Intercompany Loans shall be RMB2,653,819,204 (equivalent to approximately HK$3,051,892,000).

The Consideration was arrived at after arm's length negotiations between the Company and H-Change, and was determined with reference to the unaudited net asset value of the Target Companies Group (excluding the Excluded Properties) as at 31 May 2017 and the prevailing market value of the property projects (excluding the Excluded Properties) owned by the Target Companies Group as at 31 May 2017.

Subject to adjustments, the aggregate value of the Consideration and the Intercompany Loans shall be RMB13,325,903,636 (equivalent to approximately HK$15,324,789,000), comprising (i) the aggregate value of the Consideration in the amount of RMB10,672,084,432 (equivalent to approximately HK$12,272,897,000); and (ii) the aggregate value of the Intercompany Loans in the amount of RMB2,653,819,204 (equivalent to approximately HK$3,051,892,000).