Runway Global : Announcements and Notices - DISCLOSEABLE TRANSACTION DISPOSAL OF ASSETS OF A SUBSIDIARY

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Man Shing Global Holdings Limited

萬成環球控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8309) DISCLOSEABLE TRANSACTION DISPOSAL OF ASSETS OF A SUBSIDIARY

The Board announces that between 21 May 2017 and 16 June 2017, the Vendor, an indirect wholly-owned subsidiary of the Company, entered into two separate transactions with Purchaser A and Purchaser B respectively, pursuant to which the Vendor agreed to sell, and each of Purchaser A and Purchaser B agreed to acquire Assets A and Assets B at the total consideration of HK$1,100,000 and HK$555,000 respectively.

The Board is of the view that the First Disposal and the Second Disposal should not be aggregated as a single transaction pursuant to Rules 19.22 and 19.23 of the GEM Listing Rules because (i) the First Disposal and the Second Disposal were entered into by the Vendor with two different parties, and Purchaser A and Purchaser B are not connected or associated with one another; and (ii) the First Disposal and the Second Disposal involved the disposal of two different types of vehicles which were previously allocated for carrying out different services under two different tender contracts.

As one or more of the applicable percentage ratios (as defined under Rule 19.04(9) of the GEM Listing Rules) in relation to each of the First Disposal and the Second Disposal exceed 5% but are less than 25%, each of the First Disposal and the Second Disposal standing alone constitutes a discloseable transaction of the Company and is subject to the reporting and announcement requirements under Chapter 19 of the GEM Listing Rules.

THE FIRST DISPOSAL

The Vendor had entered into three revocable vehicle transfer agreements with Purchaser A, the details of which are summarised as follows:

Date of Agreement Parties Assets which have been disposed of and their net book value as at 31 March 2017 Consideration Vehicle Transfer Agreement 1

1. May 2017 Vendor: Man Shing

   Cleaning Service Company Limited

   Vehicle A

   Net book value: HK$0

   HK$320,000

   Purchaser A: Yue Fat

   Motor Service Limited

   Vehicle Transfer Agreement 2

2. May 2017 To the best of the

Directors' knowledge, information and

belief, having made all reasonable enquiries,

Purchaser A and its ultimate beneficial

owner(s) are Independent Third Parties.

Vehicle B

Net book value: HK$0

HK$440,000

Vehicle Transfer Agreement 3

16 June 2017 Vehicle C

Net book value: HK$0

HK$340,000

The total net book value of Assets A of the Vendor as at 31 March 2017 is nil.

Each of the above-mentioned vehicle transfer agreements provided that if the disposed vehicle has material mechanical faults within three months from the date of each of the said agreements or as at the date of the cheque to be paid by Purchaser A for Assets A, whichever is the later, Purchaser A has the right to return the defective vehicle to the Vendor and the Vendor cannot refuse to accept the defective vehicle.

After execution of these three vehicle transfer agreements, the Vendor and Purchaser A had agreed on the payment of, and Purchaser A had paid, the total amount of consideration for Assets A to the Vendor on 25 August 2017. The First Disposal is subsequently completed on 28 August 2017.

THE SECOND DISPOSAL

The Vendor had entered into two irrevocable vehicle transfer agreements with Purchaser B, the details of which are summarised as follows:

Date of Agreement Parties Assets which have been disposed of and their net book value as at 31 March 2017 Consideration Vehicle Transfer Agreement 1

8 June 2017 Vendor: Man Shing

Cleaning Service Company Limited

Vehicle D

Net book value: HK$79,600

HK$277,500

Vehicle Transfer Agreement 2

8 June 2017 Purchaser B: Johnson

Cleaning Services Company Limited

Vehicle E

Net book value: HK$71,604

HK$277,500

To the best of the

Directors' knowledge, information and

belief, having made all reasonable enquiries,

Purchaser B and its ultimate beneficial

owner(s) are Independent Third Parties.

The total net book value of Assets B of the Vendor as at 31 March 2017 is HK$151,204.

After execution of the above-mentioned vehicle transfer agreements, the Vendor and Purchaser B had agreed on the payment of, and Purchaser B had paid, the total amount of consideration for Assets B to the Vendor on 9 June 2017. The Second Disposal was subsequently completed on 20 June 2017.

Basis of determining the consideration

The consideration for the Assets was determined after arm's length negotiations between the Vendor and the Purchasers, with reference to the net book value of the Assets as mentioned above. The Board believes that the consideration is fair and reasonable.

Delivery of the Assets

Pursuant to the Vehicle Transfer Agreements, the Vendor should deliver Vehicle A, Vehicle B and Vehicle C to Purchaser A on 23 May 2017, 23 May 2017 and 19 June 2017, respectively; and should deliver Vehicle D and Vehicle E to Purchaser B on 15 June 2017.

Upon delivery of the Assets, the Vendor should provide the vehicle registration documents and the executed notices of transfer of ownership of vehicle to the Purchasers.

GAIN FROM THE DISPOSALS AND USE OF PROCEEDS

Based on the difference between the amounts of consideration for the Assets and the net book value of the Assets as mentioned above, the Group is expected to realise a gain of approximately HK$1,503,796 (before taxation) as a result of the Disposals.

The proceeds from the Disposals will be used as general working capital of the Group for its future business development.

GENERAL INFORMATION ON THE GROUP AND THE PURCHASERS

The Group is principally engaged in the provision of environmental cleaning solutions including street cleaning solutions, building cleaning solutions, bus and ferry cleaning solutions and other cleaning services which include, among others, refuse collection and waste disposal services, sewage management and pest control and fumigation services.

To the best of the Directors' knowledge, information and belief, and having made all reasonable enquiries, Purchaser A is a company incorporated with limited liability in Hong Kong which is principally engaged in the business of vehicle repair and maintenance and car dealership and Purchaser B is a company incorporated with limited liability in Hong Kong which is principally engaged in cleaning services business.

REASONS FOR AND BENEFIT OF ENTERING INTO THE VEHICLE TRANSFER AGREEMENTS

Assets A are part of the Group's specialised vehicles assigned for carrying out waste collection services under a tender contract which expired in May 2017, whereas Assets B are part of the Group's specialised vehicles assigned for carrying out street cleaning services under another tender contract which expired in April 2017. In accordance with market practice, the Group entered into the Vehicle Transfer Agreements to dispose of the Assets to save maintenance costs and to optimise its resources allocation for future business development.

The Directors are of the view that the terms of the Vehicle Transfer Agreements are fair and reasonable and the Disposals are in the interests of the Company and its shareholders as a whole.

IMPLICATIONS UNDER THE GEM LISTING RULES

The Board is of the view that the First Disposal and the Second Disposal should not be aggregated as a single transaction pursuant to Rules 19.22 and 19.23 of the GEM Listing Rules because (i) the First Disposal and the Second Disposal were entered into by the Vendor with two different parties, and Purchaser A and Purchaser B are not connected or associated with one another; and (ii) the First Disposal and the Second Disposal involved the disposal of two different types of vehicles which were previously allocated for carrying out different services under two different tender contracts.

As one or more of the applicable percentage ratios (as defined under Rule 19.04(9) of the GEM Listing Rules) in relation to each of the First Disposal and the Second Disposal exceed 5% but are less than 25%, each of the First Disposal and the Second Disposal standing alone constitutes a discloseable transaction of the Company and is subject to the reporting and announcement requirements under Chapter 19 of the GEM Listing Rules.