Wai Chun : PROPOSED ISSUE OF CONVERTIBLE BONDS UNDER SPECIFIC MANDATE AND NOTICE OF SPECIAL GENERAL MEETING

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action you should take, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Wai Chun Group Holdings Limited (the "Company"), you should at once hand this circular and the accompanying proxy form to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

(Incorporated in Bermuda with limited liability)

(Stock code: 1013)

PROPOSED ISSUE OF CONVERTIBLE BONDS UNDER

SPECIFIC MANDATE AND

NOTICE OF SPECIAL GENERAL MEETING

The notice convening a special general meeting of the Company to be held at 13/F., Admiralty Centre 2, 18 Harcourt Road, Admiralty, Hong Kong on Tuesday, 18 August 2020 at 10:30 a.m. is set out on pages 20 to 21 of this circular. Whether or not you are able to attend the meeting in person, please complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the office of the Company's branch share registrar in Hong Kong, Union Registrars Limited, at Suites 3301-04, 33/F., Two Chinachem Exchange Square, 338 King's Road, North Point, Hong Kong as soon as possible and in any event not less than 48 hours before the time of the meeting (or any adjournment thereof). Completion and return of the form of proxy will not preclude you from attending and voting at the meeting (or any adjournment thereof) should you so wish.

PRECAUTIONARY MEASURES AT THE SPECIAL GENERAL MEETING

In view of the recent developments of the Novel Coronavirus (COVID-19) pandemic, and taking into consideration of the guidelines issued by the Government of Hong Kong, the Company will implement the following preventive measures at the SGM to protect attending shareholders from the risk of infection:

• compulsory body temperature check will be conducted for every shareholder or proxy at the entrance of the venue of the SGM;
• every shareholder or proxy is required to wear surgical face mask throughout the SGM; and
• no refreshment will be served.

Any person who does not comply with the precautionary measures may be denied entry into the venue. The Company wishes to remind all shareholders that physical attendance in person at the SGM is not necessary for the purpose of exercising voting rights. Shareholders may appoint the chairman of the SGM as their proxy to vote on the resolution at the SGM as an alternative to attending the SGM in person.

* for identification purpose only

29 July 2020

CONTENTS
	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
NOTICE OF SPECIAL GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20

- i -

DEFINITIONS

In this circular, unless the context requires otherwise, the following expressions have the following meanings:

"Announcements"	the announcements of the Company dated 21 May 2020, 30
	June 2020 and 29 July 2020 in respect of the Subscription
	Agreements and the transactions contemplated thereunder
"associate(s)"	has the meaning ascribed to it under the Listing Rules
"Board"	the board of Directors
"Business Day"	a day (excluding Saturday, Sunday, public holiday and any day
	on which a tropical cyclone warning signal no. 8 or above is
	hoisted or remains hoisted between 9:00 a.m. and 12:00 noon
	and is not lowered at or before 12:00 noon or on which a
	"black" rainstorm warning signal is hoisted or remains in
	effect between 9:00 a.m. and 12:00 noon and is not
	discontinued at or before 12:00 noon) on which licensed banks
	in Hong Kong are open for business throughout their normal
	business hours
"Bye-laws"	the bye-laws of the Company, as amended from time to time
"Company"	Wai Chun Group Holdings Limited, an exempted company
	incorporated in Bermuda with limited liability, the Shares of
	which are listed on the main board of the Stock Exchange
"Completion"	completion of the subscription for and issue of the Convertible
	Bonds in accordance with the Subscription Agreements
"Completion Date"	the date of the Completion, which shall be the second Business
	Day after all conditions precedent are satisfied, or on such
	other date as the parties to the Subscription Agreements may
	agree
"connected person(s)"	has the meaning ascribed to it under the Listing Rules
"controlling shareholder(s)"	has the meaning ascribed to it under the Listing Rules
"Conversion Rights"	the rights attaching to the Convertible Bonds to convert the
	principal amount or a part thereof into the Conversion Shares
"Conversion Share(s)"	Share(s) to be subscribed for by exercise of the Conversion
	Rights
"Convertible Bonds"	convertible bonds in an aggregate principal amount of
	HK$152,000,000 to be issued by the Company, and subscribed
	by the Subscribers, pursuant to the Subscription Agreements
	for the settlement of the Loans
"Director(s)"	the director(s) of the Company
"Group"	the Company and its subsidiaries
"HK$"	Hong Kong dollars, the lawful currency of Hong Kong

- 1 -

	DEFINITIONS
"Holder(s)"	holder(s) of the Convertible Bonds
"Hong Kong"	Hong Kong Special Administrative Region of the People's
	Republic of China
"Independent Shareholders"	Shareholders who, under the Listing Rules, are not required to
	abstain from voting for the resolution approving the
	Subscription Agreements and the transactions contemplated
	thereunder
"Initial Conversion Price"	HK$0.018 per Conversion Share, subject to adjustments
	including, among others, as a result of consolidation,
	subdivision, capitalisation of profits or reserves, issue of new
	shares, dilution of share capital in the form of scrip dividend
"Last Trading Day"	20 May 2020, being the last trading day of the Shares on the
	Stock Exchange prior to the date of the announcement dated
	21 May 2020
"Latest Practicable Date"	23 July 2020, being the latest practicable date prior to the
	printing of this circular for ascertaining certain information
	contained herein
"Listing Committee"	has the meaning ascribed to it in the Listing Rules
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
	Exchange
"Loan A"	a loan due by the Company to Subscriber A which is expected
	to amount to HK$79,000,000 as at Completion Date at an
	interest rate of 6.25% per annum
"Loan B"	a loan due by the Company to Subscriber B which is expected
	to amount to HK$73,000,000 as at Completion Date at an
	interest rate of 6.25% per annum
"Loans"	Loan A and Loan B
"Long Stop Date"	31 August 2020
"Outstanding Share Option(s)"	as at the Latest Practicable Date, the 1,069,558,120
	outstanding share options granted under the Share Option
	Scheme
"PRC"	the People's Republic of China, which for the purpose of this
	circular, excludes Hong Kong, the Macau Special
	Administrative Region and Taiwan
"SGM"	the special general meeting of the Company to be held at 13/F.,
	Admiralty Centre 2, 18 Harcourt Road, Admiralty, Hong Kong
	on Tuesday, 18 August 2020 at 10:30 a.m. or any adjournment
	thereof (as the case may be), to consider and approve, among
	other things, the entering into of the Subscription Agreements
	and the transactions contemplated thereunder

- 2 -

	DEFINITIONS
"Share(s)"	ordinary share(s) of HK$0.01 each in the share capital of the
	Company
"Share Option Scheme"	the share option scheme adopted by the Company on 25
	September 2015
"Shareholder(s)"	holder(s) of Share(s)
"Specific Mandate"	the specific mandate to the Board to allot, issue and deal with
	the Conversion Shares to be proposed for approval as an
	ordinary resolution of the Shareholders at the SGM
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Subscriber A"	Ms. Wan Yuzhen, being the subscriber under the Subscription
	Agreement A
"Subscriber B"	Ms. Zhong Lirong, being the subscriber under the Subscription
	Agreement B
"Subscribers"	Subscriber A and Subscriber B
"Subscription"	the subscription of the Convertible Bonds by the Subscribers
	pursuant to the terms of the respective Subscription
	Agreements
"Subscription Agreement A"	the conditional subscription agreement dated 21 May 2020 (as
	supplemented on 30 June 2020 and 29 July 2020) and entered
	into between the Company and Subscriber A in relation to the
	Subscription of Convertible Bonds in the principal amount of
	HK$79,000,000
"Subscription Agreement B"	the conditional subscription agreement dated 21 May 2020 (as
	supplemented on 30 June 2020 and 29 July 2020) and entered
	into between the Company and Subscriber B in relation to the
	Subscription of Convertible Bonds in the principal amount of
	HK$73,000,000
"Subscription Agreements"	Subscription Agreement A and Subscription Agreement B
"%"	per cent.

- 3 -

LETTER FROM THE BOARD

(Incorporated in Bermuda with limited liability)

(Stock code: 1013)

Executive Director:	Registered Office:
Mr. Lam Ching Kui	Clarendon House
(Chairman and Chief Executive Officer)	2 Church Street
	Hamilton HM11
Independent Non-executive Directors:	Bermuda
Mr. Ko Ming Tung, Edward
Mr. Chan Chun Wai, Tony	Head Office and Principal Place of
Ms. Chen Dairong	Business in Hong Kong:
	13/F., Admiralty Centre 2
	18 Harcourt Road
	Admiralty
	Hong Kong
	29 July 2020
To the Shareholders
Dear Sir or Madam,

PROPOSED ISSUE OF CONVERTIBLE BONDS UNDER

SPECIFIC MANDATE AND

NOTICE OF SPECIAL GENERAL MEETING

INTRODUCTION

Reference is made to the Announcements.

The purpose of this circular is (i) to provide the Shareholders with further information on the Subscription Agreements and the transactions contemplated thereunder; and (ii) to give the Shareholders a notice of the SGM and other information in accordance with the requirements of the Listing Rules.

PROPOSED ISSUE OF CONVERTIBLE BONDS

The Subscription Agreements

On 21 May 2020, the Company as issuer entered into the Subscription Agreements with each of the Subscribers, pursuant to which the Subscribers conditionally agreed to subscribe for and the Company conditionally agreed to issue the Convertible Bonds with an aggregate principal amount of HK$152,000,000 under the Specific Mandate. The principal terms of the Subscription Agreements are summarised below:

Date

21 May 2020 (as supplemented on 30 June 2020 and 29 July 2020)

* for identification purpose only

- 4 -

LETTER FROM THE BOARD

Parties
Subscription Agreement A:	(1)	The Company as issuer; and
	(2)	Subscriber A as subscriber
Subscription Agreement B:	(1)	The Company as issuer; and
	(2)	Subscriber B as subscriber
Subscription of Convertible Bonds

Pursuant to the Subscription Agreements, each of the Subscribers conditionally agreed to

subscribe for Convertible Bonds as follows:
	Principal
	amount of
	Convertible
	Bonds to be
Subscribers	subscribed
	(HK$)
Subscriber A	79,000,000
Subscriber B	73,000,000
	152,000,000

Conditions precedent to the Subscription Agreements

Completion shall be conditional on the following conditions precedent being satisfied:

1. the passing by the Independent Shareholders of relevant resolution(s) at the SGM in compliance with the requirements of the Listing Rules approving (a) the Subscription Agreements and the transactions contemplated thereunder; and (b) the issue of the Convertible Bonds and the grant of the Specific Mandate for the allotment and issue of the Conversion Shares to the Subscribers in accordance with the terms of the Subscription Agreements;
2. all necessary consents and approvals required to be obtained on the part of the Company in respect of the Subscription Agreements and the transactions contemplated thereunder having been obtained;
3. all necessary consents and approvals required to be obtained on the part of the Subscribers in respect of the Subscription Agreements and the transactions contemplated thereunder having been obtained;
4. the Listing Committee of the Stock Exchange granting listing of and permission to deal in the Conversion Shares to be allotted and issued upon exercise of the Conversion Rights;
5. none of the warranties given by the Company thereunder having been breached in any material respect (or, if capable of being remedied, has not been remedied), or is misleading or untrue in any material respect; and

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LETTER FROM THE BOARD

1. none of the warranties given by the Subscribers thereunder having been breached in any material respect (or, if capable of being remedied, has not been remedied), or is misleading or untrue in any material respect.

The Company shall use its best endeavours to procure the fulfilment of the conditions precedent set out in conditions (i), (ii), (iv) and (v) above as soon as practicable and in any event on or before the Long Stop Date. The Subscribers shall use its best endeavours to procure the fulfilment of the conditions precedent set out in conditions (iii) and (vi) above as soon as practicable and in any event on or before the Long Stop Date. The conditions precedent set out in conditions (i), (ii), (iii) and (iv) above are incapable of being waived. The Subscribers may at any time by notice in writing to the Company waive the condition set out in condition (v) above. The Company may at any time by notice in writing to the Subscribers to waive the condition set out in condition (vi) above.

In the event that any of the conditions precedent referred to above is not fulfilled or waived (to the extent it is capable of being waived) on or before the Long Stop Date, the Subscription Agreements shall cease and determine and no party shall have any claim against the other party in respect of any matter or thing arising out of or in connection with the Subscription Agreements save in respect of any antecedent breach of any obligation hereof.

Completion of each of the Subscription Agreements is not inter-conditional but it is intended that completion of the Subscription Agreements will take place simultaneously.

As at the Latest Practicable Date, none of the conditions have been fulfilled.

Principal terms and conditions of the Convertible Bonds

Aggregate principal amount	:	HK$152,000,000
Ranking	:	The Convertible Bonds constitute direct, unsubordinated,
		unconditional and unsecured obligations of the Company
		and shall at all times rank pari passu among themselves
		and with all existing and future unsubordinated and
		unsecured obligations of the Company, and shall entitle
		the Holder(s) to receive repayment in priority over the
		Shareholders.
Form and denomination	:	The Convertible Bonds will be issued in registered form
		in the denomination of HK$5,000,000 each.
Issue price	:	100% of the principal amount of the Convertible Bonds
Initial Conversion Price	:	HK$0.018 per Conversion Share, subject to adjustments
		upon occurrence of certain events.
Maturity date	:	The date falling on the third anniversary of the date of
		issue of the Convertible Bonds.
Interest rate	:	4% per annum accrued on a daily basis of a 365-day year
		and payable quarterly in arrears.
Conversion period	:	The period commencing from the issue date of the
		Convertible Bonds up to 4:00 p.m. on the day
		immediately prior to and exclusive of the maturity date
		of the Convertible Bonds.

- 6 -

LETTER FROM THE BOARD

Conversion Rights and restrictions	:	The Holders shall, subject to compliance with the
		procedures set out in the terms and conditions under the
		Subscription Agreements, have the right at any time
		during the conversion period to convert the whole or part
		of the outstanding principal amount of the Convertible
		Bonds registered in its name into the Conversion Shares
		provided further that (i) any conversion shall be made in
		amounts of not less than a whole multiple of
		HK$5,000,000 on each conversion save that if at any
		time the aggregate outstanding principal amount of the
		Convertible Bonds is less than HK$5,000,000, the whole
		(but not part only) of the outstanding principal amount of
		the Convertible Bonds may be converted; and (ii) the
		exercise of the Conversion Rights will not cause the
		Company to be unable to meet the public float
		requirement under the Listing Rules.
Adjustment to the conversion price	:	If the following events occur, the Initial Conversion Price
		shall be adjusted:
		(a) Consolidation or sub-division of the Shares
		If and whenever the Shares by reason of any
		consolidation or sub-division become of a different
		nominal amount, the conversion price in force
		immediately prior thereto shall be adjusted by
		multiplying it by the revised nominal amount and
		dividing the result by the former nominal amount.
		Each such adjustment shall be effective from the
		close of business in Hong Kong on the day
		immediately preceding the date on which the
		consolidation or sub-division becomes effective.
		(b) Capitalisation of profits or reserves
		If and whenever the Company shall issue (other
		than in lieu of the whole or part of a cash dividend
		and other than issue that would amount to a capital
		distribution) any Shares credited as fully paid to the
		Shareholders by way of capitalisation of profits or
		reserves (including any share premium account or
		capital redemption reserve fund), Shares paid up
		out of distributable profits or reserves and/or share
		premium account or capital redemption reserve
		fund issued in lieu of the whole or any part of a
		relevant cash dividend, being a scrip dividend (but
		only to the extent that the market value of such
		Shares exceeds 110% of the amount of such
		relevant cash dividend or the relevant part thereof),
		the conversion price in force immediately prior to
		such issue shall be adjusted by multiplying it by the
		aggregate nominal amount of the issued Shares
		immediately before such issue and dividing the
		result by the sum of such aggregate nominal amount
		and the aggregate nominal amount of the Shares
		issued in such capitalisation.

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LETTER FROM THE BOARD

Each such adjustment shall be effective (if appropriate retroactively) from the commencement of the day following the record date for such issue.

1. Capital distribution
   If and whenever the Company shall make any capital distribution to the Shareholders (in their capacity as such) (whether on a reduction of capital or otherwise) or shall grant to such Holders rights to acquire for cash assets of the Company or any of its subsidiaries, the conversion price in force immediately prior to such distribution or grant shall be reduced by multiplying it by the following fraction:

A - B

A

where:

A = the market price on the date on which the capital distribution or, as the case may be, the grant is publicly announced or (failing any such announcement) the next preceding day of the capital distribution or, as the case may be, of the grant; and

B = the fair market value on the day of such announcement or (as the case may require) the next preceding day, as determined in good faith by the independent auditors, of the portion of the capital distribution or of such right which is attributable to one Share. For avoidance of doubt, if the capital distribution is distributions in cash the fair market value shall be the cash value and determination by the independent auditors is not required.

Provided that (aa) if in the opinion of the independent auditors, the use of the fair market value as aforesaid produces a result which is significantly inequitable, such independent auditors may instead determine (and in such event the above formula shall be construed as if B meant) the amount of the said market price which should properly be attributed to the value of the capital distribution or rights; and (bb) the provisions of this paragraph (c) shall not apply in relation to the issue of Shares paid out of profits or reserves and issued in lieu of a cash dividend.

Each such adjustment shall be effective (if appropriate retroactively) from the commencement of the day following the record date for the capital distribution or grant.

- 8 -

LETTER FROM THE BOARD

1. Issue of Shares for subscription by way of rights
   If and whenever the Company shall offer to Shareholders new Shares for subscription by way of rights, or shall grant to Shareholders any options or warrants to subscribe for new Shares, at a price which is less than 90% of the market price on the date of the announcement of the terms of the offer or grant, the conversion price shall be adjusted by multiplying the conversion price in force immediately before the date of the announcement of such offer or grant by a fraction of which the numerator is the number of Shares in issue immediately before the date of such announcement plus the number of Shares which the aggregate of the amount (if any) payable for the rights, options or warrants and of the amount payable for the total number of new Shares comprised therein would purchase at such market price per share and the denominator is the number of Shares in issue immediately before the date of such announcement plus the aggregate number of Shares offered for subscription or comprised in the options or warrants.
   Such adjustment shall be effective (if appropriate retroactively) from the commencement of the day next following the record date for the offer or grant.
   Provided however that no such adjustment shall be made if the Company shall make a like offer or grant (as the case may be) at the same time to the Holders (subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of any recognised regulatory body or any stock exchange in any territory outside Hong Kong) as if it had exercised the Conversion Rights under the Convertible Bonds registered in their names that the Holders hold out of the total principal amount of the Convertible Bonds outstanding at the time of the proposed redemption.

- 9 -

LETTER FROM THE BOARD

1. (aa) Issue of convertible or exchangeable securities

If and whenever the Company shall issue wholly for cash any securities which by their terms are convertible into or exchangeable for or carry rights of subscription for new Shares, and the total Effective Consideration per Share (as defined in this paragraph (e) below) initially receivable for such securities is less than 90% of the market price on the date of the announcement of the terms of issue of such securities, the conversion price shall be adjusted by multiplying the conversion price in force immediately prior to the issue by a fraction of which the numerator is the number of Shares in issue immediately before the date of the issue plus the number of Shares which the total Effective Consideration receivable for the securities issued would purchase at such market price per Share and the denominator is the number of Shares in issue immediately before the date of the issue plus the number of Shares to be issued upon conversion or exchange of, or the exercise of the subscription rights conferred by, such securities at the initial conversion or exchange rate or subscription price.

Such adjustment shall become effective (if appropriate retroactively) from the close of business in Hong Kong on the Business Day next preceding whichever is the earlier of the date on which the issue is announced and the date on which the Company determines the conversion or exchange rate or subscription price.

- 10 -

LETTER FROM THE BOARD

1. Modification of rights of convertible or exchangeable securities
   If and whenever the rights of conversion or exchange or subscription attached to any such securities as are mentioned in section (aa) of this sub-paragraph (e) are modified so that the total Effective Consideration per Share (as defined below) initially receivable for such securities shall be less than 90% of the market price on the date of announcement of the proposal to modify such rights of conversion or exchange or subscription, the conversion price shall be adjusted by multiplying the conversion price in force immediately prior to such modification by a fraction of which the numerator is the number of Shares in issue immediately before the date of such modification plus the number of Shares which the total Effective Consideration receivable for the securities issued at the modified conversion or exchange price would purchase at such market price and of which the denominator is the number of Shares in issue immediately before such date of modification plus the number of Shares to be issued upon conversion or exchange of or the exercise of the subscription rights conferred by such securities at the modified conversion or exchange rate or subscription price.
   Such adjustment shall become effective as at the date upon which such modification shall take effect. A right of conversion or exchange or subscription shall not be treated as modified for the foregoing purposes where it is adjusted to take account of rights or capitalisation issues and other events normally giving rise to adjustment of the conversion price provided that corresponding adjustment has already been made to the conversion price in respect of such an event.

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LETTER FROM THE BOARD

For the purposes of this paragraph (e), the "total Effective Consideration" receivable for the securities issued shall be deemed to be the consideration receivable by the Company for any such securities plus the additional minimum consideration (if any) to be received by the Company upon (and assuming) the conversion or exchange thereof or the exercise of such subscription rights, and the total Effective Consideration per Share initially receivable for such securities shall be such aggregate consideration divided by the number of Shares to be issued upon (and assuming) such conversion or exchange at the initial conversion or exchange rate or the exercise of such subscription rights at the initial subscription price, in each case without any deduction for any commissions, discounts or expenses paid, allowed or incurred in connection with the issue.

1. Issue of Shares being made wholly for cash at a price less than 90% of the market price per Share
   If and whenever the Company shall issue wholly for cash any Shares at a price per Share which is less than 90% of the market price on the date of the announcement of the terms of such issue, the conversion price shall be adjusted by multiplying the conversion price in force immediately before the date of such announcement by a fraction of which the numerator is the number of Shares in issue immediately before the date of such announcement plus the number of Shares which the aggregate amount payable for the issue would purchase at such market price and the denominator is the number of Shares in issue immediately before the date of such announcement plus the number of Shares so issued.
   Such adjustment shall become effective on the date of the issue.
2. If and whenever the Company shall issue Shares for the acquisition of asset at a total Effective Consideration per Share (as defined in this paragraph (g) below) which is less than 90% of the market price at the date of the announcement of the terms of such issue, the conversion price shall be adjusted in such manner as may be determined by the independent auditors. Such adjustment shall become effective on the date of issue.

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LETTER FROM THE BOARD

		For the purpose of this paragraph (g) "total
		Effective Consideration" shall be the aggregate
		consideration credited as being paid for such Shares
		by the Company on acquisition of the relevant asset
		without any deduction of any commissions,
		discounts or expenses paid, allowed or incurred in
		connection with the issue thereof, and the "total
		Effective Consideration per Share" shall be the
		total Effective Consideration divided by the number
		of Shares issued as aforesaid.
Conversion Shares	:	Based on the aggregate principal amount of the
		Convertible Bonds of HK$152,000,000, the Convertible
		Bonds is convertible into a total of 8,444,444,444
		Conversion Shares at the Initial Conversion Price
		(subject to adjustments).
Early redemption at the option of	:	The Company shall be entitled at its sole discretion, by
the Company		giving not less than fourteen (14) days' notice to the
		Holders, propose to the Holders to redeem the
		outstanding Convertible Bonds (in multiples of
		HK$5,000,000 or such lesser amount as may represent
		the entire principal amount thereof) an amount
		equivalent to 100% of the principal amount of such
		outstanding Convertible Bonds at any time after the date
		of issue of the Convertible Bonds up to and including the
		date falling fourteen (14) days immediately before the
		maturity date of the Convertible Bonds.
Ranking of Conversion Shares	:	The Conversion Shares, when allotted and issued, shall
		rank pari passu in all respects with the Shares in issue on
		the relevant conversion date including the right to all
		dividends or other distributions, paid or made on or after
		the relevant conversion date other than any dividend or
		other distribution previously declared or recommended
		or resolved to be paid or made if the record date thereof
		shall be on or before the relevant conversion date.
Voting rights	:	The Subscribers shall not have any right to attend or vote
		in any general meeting of the Company.
Transferability	:	Subject to compliance with the Listing Rules, the
		Convertible Bonds may be transferred or assigned in
		whole or in part in integral multiples of HK$5,000,000
		by the Holders to any party.
Listing	:	No application will be made by the Company for the
		listing of the Convertible Bonds on the Stock Exchange.
		Application will be made to the Listing Committee of the
		Stock Exchange for the listing of, and permission to deal
		in, the Conversion Shares.
Security	:	The obligations of the Company under the Convertible
		Bonds are unsecured.

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LETTER FROM THE BOARD

Conversion Shares

Upon full conversion of the Convertible Bonds at the Initial Conversion Price of HK$0.018 each (subject to adjustments), a maximum of 8,444,444,444 Conversion Shares will be allotted and issued which represents:

1. approximately 39.48% of the issued share capital of the Company as at the Latest Practicable Date; and
2. approximately 28.30% of the issued share capital of the Company as to be enlarged by the allotment and issue of the Conversion Shares (assuming that there is no other change to the total number of Shares from the Latest Practicable Date to the Completion Date).

Initial Conversion Price

The Initial Conversion Price of HK$0.018 (subject to adjustments) per Conversion Share represents:

1. a premium of approximately 5.88% over the closing price of HK$0.017 per Share as quoted on the Stock Exchange on the Last Trading Day;
2. a premium of approximately 4.65% over the average closing price of approximately HK$0.0172 per Share as quoted on the Stock Exchange for the last five (5) consecutive trading days up to and including the Last Trading Day;
3. a discount of approximately 0.55% to the average closing price of approximately HK$0.0181 per Share as quoted on the Stock Exchange for the last ten (10) consecutive trading days up to and including the Last Trading Day; and
4. a discount of approximately 21.74% to the closing price of approximately HK$0.023 per Share as quoted on the Stock Exchange on the Latest Practicable Date.

As the Company recorded consolidated net liabilities as at 31 March 2020, the comparison of the Initial Conversion Price with the net asset value of the Company is not applicable.

The Initial Conversion Price of HK$0.018 (subject to adjustments) per Conversion Share was arrived at after arm's length negotiations between the Company and the Subscribers with reference to the recent trading prices of the Shares. The Directors consider that the Initial Conversion Price pursuant to the Subscription Agreements and the reasons for and benefits of the Subscription are fair and reasonable and are in the interests of the Shareholders as a whole.

Completion

Completion shall take place at or before 4:00 p.m. on the second Business Day (or such other date as agreed by the Company and the Subscribers) after fulfilment of all the conditions precedent set out above.

Minimum public float requirement

Pursuant to the terms of the Convertible Bonds, the Conversion Rights are restricted by the public float requirement under the Listing Rules. In other words, a Holder may only convert such number of Convertible Bonds into Shares which would not cause the Company to not comply with the public float requirement under the Listing Rules following the conversion.

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LETTER FROM THE BOARD

Before the exercise of the Conversion Rights, the Holder shall deliver a written conversion notice to the Company setting out the principal amount of Convertible Bonds to be converted into Conversion Shares. Having taken into account the Initial Conversion Price as adjusted by the occurrence of triggering events as mentioned above (if any), if the issue of the Conversion Shares pursuant to the exercise of the Conversion Rights by the Holder would result in the Company to not comply with the minimum public float requirement under the Listing Rules, then the Company shall not allow the Holder to exercise such Conversion Rights so as to maintain the minimum public float requirement, and the conversion notice shall be void.

Changes to shareholding structure of the Company as a result of the proposed issue of Conversion Shares

Set out below the shareholding structure of the Company as at the Latest Practicable Date, and the effect on the shareholding structure of the Company upon completion of the allotment and issue of the Conversion Shares (assuming full conversion of the Convertible Bonds into the Conversion Shares and that there is no other change in the number of issued Shares from the Latest Practicable Date up to the date when the Conversion Rights are exercised in full):

							Immediately after
		As at the		full exercise of the
Name of Shareholder		Latest Practicable Date		Conversion Rights (note 4)
		Number of	Approximate		Number of	Approximate
		Shares	%		Shares	%
Ka Chun Holdings Limited (note 1)	15,543,386,000		72.66		15,543,386,000		52.10
Lam Ching Kui (note 2)		384,810,000		1.80			384,810,000		1.29
	15,928,196,000		74.46		15,928,196,000		53.39
Subscriber A		-	-	4,797,104,889		16.08
Subscriber B		-	-	4,113,917,555		13.79
Public Shareholders
Subscriber A	408,216,000		1.91			-	-
Subscriber B (note 5)	58,362,000		0.27			-	-
Other public Shareholders (note 3)		4,996,388,483		23.36			4,996,388,483		16.75
	5,462,966,483		25.54		4,996,388,483		16.75
Total	21,391,162,483		100.00		29,835,606,927		100.00

Notes:

1. Ka Chun Holdings Limited, a company owned as to 100% by Wai Chun Investment Fund, which is wholly-owned by Mr. Lam Ching Kui, an executive Director, holds 15,543,386,000 Shares.
2. Mr. Lam Ching Kui, the Chairman and executive Director of the Company, directly holds 384,810,000 Shares.
3. For indicative purposes only and the number of Conversion Shares to be issued upon the conversion of the Convertible Bonds are subject to the minimum public float requirement of the Listing Rules and the relevant restrictions under the Subscription Agreements.
4. Certain percentage figures included in the above tables have been subject to rounding adjustments. Accordingly, figures shown as totals may not be an arithmetic aggregation of the figures preceding them.
5. Subscriber B has 213,911,624 share options of under the Company's Share Option Scheme, representing approximately 1% of the existing issued share capital of the Company and approximately 0.72% of the issued share capital of the Company as enlarged by the issue of the Conversion Shares upon full conversion of the Convertible Bonds. The exercise period of the options is 5 years from the date of grant of the options, i.e. 15 January 2016 to 14 January 2021.

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LETTER FROM THE BOARD

Dilution and financial effects of the issue of the Convertible Bonds

For indicative purposes only and subject to the minimum public float requirement of the Listing Rules and the relevant restrictions under the Subscription Agreements, upon full conversion of the Convertible Bonds at the Initial Conversion Price, the Convertible Bonds will be convertible into 8,444,444,444 Shares, representing approximately 39.48% of the existing issued share capital of the Company and approximately 28.30% of the issued share capital of the Company as enlarged by the issue of the Conversion Shares upon full conversion of the Convertible Bonds.

Assuming no Outstanding Share Options being exercised and that there is no change in the number of issued Shares from the Latest Practicable Date up to the date when the Conversion Rights are exercised in full, the shareholding of the Independent Shareholders will be diluted from approximately 25.54% before full conversion of the Convertible Bonds to approximately 16.75% immediately after full conversion of the Convertible Bonds. However, as mentioned above, it has been set out in the terms of the Convertible Bonds that the Holder may only convert such number of Convertible Bonds as would not cause the Company to not comply with the minimum public float requirement under the Listing Rules following the conversion.

According to the 31 March 2020 final result of the Company, the Company recorded net liabilities of approximately HK$192,668,000 as at 31 March 2020 and loss attributable to owners of the Company amounted to approximately HK$28,094,000. Upon the Completion, the net asset value of the Company will be increased by the amount of the net proceeds. Moreover, the Shares in issue will be increased as a result of the conversion of the Convertible Bonds (if any). For indicative purpose only and subject to the minimum public float requirement of the Listing Rules and relevant restrictions under the Subscription Agreements, upon full conversion of the Conversion Bonds, the increase in the net asset value is larger than the increase in the number of Conversion Shares.

In view of (i) the reasons for and benefits of entering into the Subscription Agreements as set out below; (ii) the terms of the Subscription Agreements and the Convertible Bonds being fair and reasonable and in the interests of the Shareholders as a whole; and (iii) the minimum public float requirement of the Listing Rules and relevant restrictions under the Subscription Agreements, the Board is of the view that the feasible level of dilution (subject to the minimum public float requirement of the Listing Rules and the relevant restrictions under the Subscription Agreements) to the shareholding interests of the Independent Shareholders is acceptable.

Fund raising activities of the Company in the past 12 months

Save for the proposed issue of perpetual convertible bonds as disclosed in the announcement of the Company dated 25 February 2020, which was subsequently terminated and not proceeded with, the Company did not raise funds on any issue of equity securities raising activities during the past twelve months immediately preceding the date of the announcement of the Company dated 21 May 2020.

Mandate to issue the Conversion Shares

The issue and allotment of the Conversion Shares under the Specific Mandate are subject to the approval of the Independent Shareholders at the SGM.

INFORMATION ABOUT THE PARTIES

The Group is principally engaged in (i) general trading; (ii) sales and integration services by the production of software and provision of solutions and related services; and (iii) the provision of telecommunications infrastructure solution services.

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LETTER FROM THE BOARD

The Subscribers are individual investors who are experienced in investments and the finance industry. As at the Latest Practicable Date, Subscriber A and Subscriber B are the beneficial owners of 408,216,000 Shares and 58,362,000 Shares respectively, representing approximately 1.91% and 0.27% of the existing issued share capital of the Company.

To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, the Subscribers are third parties independent of the Company and its connected persons as at the Latest Practicable Date and they are independent from and not acting in concert (as defined in the Hong Kong Code on Takeovers and Mergers) with each other or their respective associates.

Since the Subscribers (i) are not connected persons of the Company; (ii) are not directors or substantial shareholders of the Company or their respective associates; and (iii) are independent of and not connected with the Company and its connected persons, they are regarded as public shareholders of the Company as at the Latest Practicable Date.

Based on the terms and conditions of the Subscription Agreements and the Convertible Bonds, the Subscribers are not entitled to appoint any individual as a Director, whether or not the Conversion Rights have been exercised in whole or in part, save and except for the rights provided in the Bye-laws or by law for Shareholders to nominate candidates for election to the Board in accordance with the formalities requirement specified therein.

USE OF PROCEEDS FROM PROPOSED ISSUE OF THE CONVERTIBLE BONDS

The gross proceeds from the issue of the Convertible Bonds are expected to be approximately HK$152,000,000. The subscription amount payable by the Subscribers under the Subscription Agreements shall be satisfied by way of offsetting the outstanding principal amount and accrued interest under the Loans, payable by the Company to the Subscribers and/or their associates which is expected to amount to a total of HK$152,000,000 as at Completion Date.

The Loans were initially owed by the Company to Ka Chun Holdings Limited, which is indirectly wholly-owned by Mr. Lam Ching Kui, the Chairman, Executive Director and controlling shareholder of the Company, and assigned by Ka Chun Holdings Limited to the Subscribers on 9 May 2020. There is no agreement, arrangement, undertaking or understanding of any form that provides the Subscribers the right to assign the Loans back to Mr. Lam Ching Kui in the event that the Company defaults the Loans or is unable to settle the Loans by issuance of the Convertible Bonds.

REASONS FOR AND BENEFITS OF ENTERING INTO THE SUBSCRIPTION AGREEMENTS

As at 31 March 2020, the Group had total outstanding borrowings of approximately HK$179,141,000 (including the Loans) and the gearing ratio, which was calculated by dividing the total borrowings by the capital deficiency attributable to owners of the Company, decreased from approximately 109.98% as at 31 March 2019 to approximately 94.06% as at 31 March 2020. The Company will encounter difficulties in obtaining additional debt financing from commercial banks or financial institutions under the existing financing environment if its gearing ratio is not decreased. Any expansion plans would be limited by the Group's capacity to obtain external financing from sources other than banks or financial institutions and the Group may be required to scale back its planned expansion, which might adversely affect its ability to execute its planned growth strategy and generate revenue for its Shareholders.

In light of the above, if the Company continues to have a high gearing ratio, it will affect the Group's resistance against adverse economic condition and potentially limit the Company's ability to obtain further facilities. The Company is thus exposed to liquidity stress which might restrict its ability to make necessary capital expenditure or develop business opportunities in the future, and adversely affect its results of operations and financial position. As at 31 March 2020, the gearing ratio was approximately 94.06%. The Directors are of the view that by decreasing the gearing ratio the Company

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LETTER FROM THE BOARD

could (i) strengthen its negotiation power to renew and/or obtain bank financing facilities and (ii) improve the financial position of the Group which in turn shall benefit the Company and its Shareholders as a whole.

The Board considers that the Loans which bear interest at 6.25% per annum together represent a heavy financial burden to the Group as the Company was in a net liabilities position with cash or cash equivalents in the amount of HK$12,008,000 and current liabilities in the amount of HK$77,501,000 as at 31 March 2020. In view of the above, the Board has reviewed and explored different approaches to settle the Loans (together with the accrued interest) and considered the issue of the Convertible Bonds to be the most effective and suitable for reducing the amount of interest expense incurred by the Group per annum, enhancing the financial position of the Group and reducing the gearing ratio of the Group as

1. the Convertible Bonds bear a lower interest rate of 4% per annum and will be able to minimize the short-term financial burden to the Group; (ii) the principal amount of the Loans (together with the accrued interest) will be fully settled upon the exercise in full of the Conversion Rights without requiring any cash outflow; and (iii) the issue of the Convertible Bonds does not have an immediate dilution effect on the shareholding of the Company.

Notwithstanding the potential dilution impact to the existing Shareholders and the Independent Shareholders following the feasible maximum conversion of the Convertible Bonds as limited under its terms and conditions, in view of the aforesaid reasons and benefits of entering into the Subscription Agreements, namely that the proposed issue of the Convertible Bonds will (i) improve the financial position of the Group by offloading the burden of the Shareholder's Loan and reducing the gearing ratio of the Group; (ii) improve the profitability of the Group by saving financial costs; (iii) provide the Group with flexibility in financing in view of the distribution deferral and optional redemption features;

1. broaden the financing channels for future expansion of the Group's business as the reduced debt level and increased book value will allow the Company to meet the loan criteria of potential lenders; and (v) minimise the Company's financing uncertainties without causing immediate dilution or potential dilution, the Directors consider that the terms of the Subscription Agreements are fair and reasonable and that the transactions contemplated thereunder are in the interests of the Company and the Shareholders as a whole.

SPECIAL GENERAL MEETING

The SGM will be held by the Company at 13/F., Admiralty Centre 2, 18 Harcourt Road, Admiralty, Hong Kong on Tuesday, 18 August 2020 at 10:30 a.m., to consider and if thought fit, to approve, among other things, the entering into of the Subscription Agreements and the transactions contemplated thereunder. A form of proxy for use at the SGM is enclosed with this circular.

Any Shareholder and his or her or its associates with a material interest in the resolution will abstain from voting on the resolution on the entering into of the Subscription Agreements and the transactions contemplated thereunder at the SGM. As at the Latest Practicable Date, Subscriber A and Subscriber B are the beneficial owners of 408,216,000 Shares and 58,362,000 Shares respectively, representing approximately 1.91% and 0.27% of the existing issued share capital of the Company. As such, the Subscribers and their respective associates will be required to abstain from voting on the relevant resolution at the SGM.

Save as disclosed above, to the best knowledge, information and belief of the Directors having made all reasonable enquires, no other Shareholders are required to abstain from voting on the relevant resolution to be considered at the SGM as at the Latest Practicable Date and no Director had a material interest in the issue of the Convertible Bonds and was required to abstain from voting on the board resolution in respect of the issue of the Convertible Bonds.

The notice of the SGM is set out on pages 20 to 21 of this circular.

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LETTER FROM THE BOARD

For those who intend to direct a proxy to attend the SGM, please complete the form of proxy and return the same in accordance with the instructions printed thereon. In order to be valid, the above documents must be delivered to the Company's branch share registrar in Hong Kong, Union Registrars Limited at Suites 3301-04, 33/F., Two Chinachem Exchange Square, 338 King's Road, North Point, Hong Kong not less than 48 hours before the time appointed for the SGM or any resumed session. The register of members of the Company will be closed from Thursday, 13 August 2020 to Tuesday, 18 August 2020 (both days inclusive), during which time no share transfers will be effected. The holders of the Shares whose names appear on the register of members of the Company on Tuesday, 18 August 2020 are entitled to attend and vote in respect of the resolution to be proposed at the SGM.

You are urged to complete and return the form of proxy whether or not you intend to attend the SGM. Completion and return of the form of proxy will not preclude you from attending and voting at the SGM (or any subsequent meetings following the adjournments thereof) should you wish to do so.

RECOMMENDATION

The Board is of the view that although the Subscription Agreements and the transactions contemplated thereunder are not in the ordinary and usual course of business of the Group, the terms are on normal commercial terms, fair and reasonable and in the interests of the Company and its Shareholders as a whole. As such, the Board recommends that all Independent Shareholders vote in favour of the ordinary resolution to be proposed at the SGM.

VOTE BY POLL

In accordance with the Bye-laws, all the votes at the SGM must be taken by poll. The methods of voting by the Shareholders at the SGM will be conducted by the combination of on-site voting and online voting.

By Order of the Board

Wai Chun Group Holdings Limited

Lam Ching Kui

Chairman and Chief Executive Officer

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NOTICE OF SPECIAL GENERAL MEETING

(Incorporated in Bermuda with limited liability)

(Stock code: 1013)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the special general meeting (the "Meeting") of Wai Chun Group Holdings Limited (the "Company") will be held at 13/F., Admiralty Centre 2, 18 Harcourt Road, Admiralty, Hong Kong on Tuesday, 18 August 2020 at 10:30 a.m. to consider, if thought fit, transact the following resolution of the Company by way of ordinary resolution:

ORDINARY RESOLUTION

"THAT:

1. the subscription agreements dated 21 May 2020 (the "Subscription Agreements") (as supplemented on 30 June 2020 and 29 July 2020) and entered into between the Company and Ms. Wan Yuzhen and Ms. Zhong Lirong respectively in respect of the issue of Convertible Bonds in an aggregate principal amount of HK$152,000,000 (the "Convertible Bonds") (copies of which marked "A" have been produced to the Meeting and initialled by the chairman of the Meeting for identification purpose) upon and subject to the terms and conditions as set out therein and the transactions contemplated thereunder be and are hereby approved, confirmed and ratified;
2. the issue of the Convertible Bonds by the Company in accordance with the terms and conditions of the Subscription Agreements be and is hereby approved;
3. the allotment and issue of new ordinary shares of HK$0.01 each in the share capital of the Company (the "Conversion Shares") which may fall to be allotted and issued upon the exercise of the conversion rights attaching to the Convertible Bonds in accordance with the terms and conditions of the Subscription Agreements be and are hereby approved;
4. conditional upon, among others, the listing committee of The Stock Exchange of Hong Kong Limited granting the listing of, and permission to deal in, the Conversion Shares, the specific mandate to the directors of the Company (the "Directors") to exercise the powers of the Company for the allotment and issue of the Conversion Shares in accordance with the terms and conditions of the Convertible Bonds be and is hereby approved; and
5. any one Director be and is hereby authorised to do all such things and acts as he may in his discretion consider necessary, desirable or expedient, for the purposes of or in connection with the implementation of the Subscription Agreements and the transactions contemplated thereunder, including but not limited to the execution of all such documents under seal where

* for identification purpose only

- 20 -

NOTICE OF SPECIAL GENERAL MEETING

applicable, as he considers necessary or expedient in his opinion to implement and/or give effect to the issue of the Convertible Bonds and the allotment and issue of the Conversion Shares which may fall to be allotted and issued upon exercise of the conversion rights attaching to the Convertible Bonds."

	By Order of the Board
	Wai Chun Group Holdings Limited
	Lam Ching Kui
	Chairman and Chief Executive Officer
Hong Kong, 29 July 2020
Registered Office:	Head Office and Principal Place of
Clarendon House	Business in Hong Kong:
2 Church Street	13/F., Admiralty Centre 2
Hamilton HM11	18 Harcourt Road
Bermuda	Admiralty
	Hong Kong

Notes:

1. A member entitled to attend and vote at the special general meeting ("Meeting") is entitled to appoint one or more proxies to attend and on a poll vote instead of him. A proxy need not be a member of the Company.
2. In case of joint shareholdings, the vote of the senior joint shareholder who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the votes of the other joint shareholder(s) and for this purposes seniority will be determined by the order in which the name stands on the Register of Members of the Company in respect of the joint shareholding.
3. In order to be valid, a form of proxy and the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of such power of authority, must be deposited at the Company's branch share registrar in Hong Kong, Union Registrars Limited, at Suites 3301-04, 33/F., Two Chinachem Exchange Square, 338 King's Road, North Point, Hong Kong, not less than 48 hours before the time fixed for holding the Meeting (or any adjourned meeting thereof). Completion and return of the form of proxy will not preclude any member from attending and voting in person at the Meeting (or any adjourned meeting thereof) should he so wishes.
4. The register of members of the Company will be closed from Thursday, 13 August 2020 to Tuesday, 18 August 2020 (both days inclusive), during which period no transfer of shares of the Company will be registered. In order to qualify for attending and voting at the Meeting (or any adjournment thereof), all transfers of shares of the Company accompanied by the relevant share certificates(s) must be lodged with the Company's branch share registrar in Hong Kong at the above address by no later than 4:00 p.m. on Wednesday, 12 August 2020.
5. In case a Typhoon Signal No. 8 (or above) or a Black Rainstorm Warning Signal is hoisted but lowered before 7:00 a.m. on Tuesday, 18 August 2020, the Meeting will be held as scheduled at 10:30 a.m. on the same day at the same venue; or a Typhoon Signal No. 8 (or above) or a Black Rainstorm Warning Signal is hoisted or remains hoisted any time after 7:00 a.m. on Tuesday, 18 August 2020, the Meeting will be adjourned to 10:30 a.m. on Tuesday, 25 August 2020, or another appropriate date and time to be advised, at the same venue.
6. As at the date of this notice, the Board consists of one executive Director, namely Mr. Lam Ching Kui (Chairman and Chief Executive Officer) and three independent non-executive Directors, namely Mr. Ko Ming Tung, Edward, Mr. Chan Chun Wai, Tony and Ms. Chen Dairong.

PRECAUTIONARY MEASURES AT THE SPECIAL GENERAL MEETING

In view of the recent developments of the Novel Coronavirus (COVID-19) pandemic, and taking into consideration of the guidelines issued by the Government of Hong Kong, the Company will implement the following preventive measures at the SGM to protect attending shareholders from the risk of infection:

• compulsory body temperature check will be conducted for every shareholder or proxy at the entrance of the venue of the SGM;
• every shareholder or proxy is required to wear surgical face mask throughout the SGM; and
• no refreshment will be served.

Any person who does not comply with the precautionary measures may be denied entry into the venue. The Company wishes to remind all shareholders that physical attendance in person at the SGM is not necessary for the purpose of exercising voting rights. Shareholders may appoint the chairman of the SGM as their proxy to vote on the resolution at the SGM as an alternative to attending the SGM in person.

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