Asiaray Media : CONNECTED TRANSACTION ISSUE OF PERPETUAL SUBORDINATED CONVERTIBLE SECURITIES

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

This announcement is for information purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of Asiaray Media Group Limited.

Asiaray Media Group Limited

雅 仕維 傳媒 集 團有限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1993)

CONNECTED TRANSACTION ISSUE OF PERPETUAL SUBORDINATED

CONVERTIBLE SECURITIES

ISSUE OF PSCS

On 7 September 2017 (after trading hours), the Company entered into the Subscription Agreement with the Subscriber pursuant to which the Company has conditionally agreed to issue, and Subscriber has conditionally agreed to subscribe for, the PSCS in the principal amount of HKD50,000,000 convertible into Conversion Shares at the initial Conversion Price of HKD3.54 per Conversion Share (subject to adjustments) in two tranches. For the avoidance of doubt, the Distribution shall not lead to any adjustment of the Conversion Price.

Assuming the exercise in full of the conversion rights attaching to the PSCS at the initial Conversion Price, a total of 14,124,293 Conversion Shares will be issued, representing approximately 3.21% of the existing issued share capital of the Company and approximately 3.11% of the issued share capital of the Company as enlarged by the Conversion.

The net proceeds from the issue of the PSCS (after deduction of related expenses) will be approximately HKD49,700,000, which is intended to be applied as general working capital of the Company.

Completion is conditional upon, among other things, the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Conversions Shares. Application will be made to the Stock Exchange for the listing of and permission to deal in the Conversion Shares.

CONNECTED TRANSACTION

The Subscriber is the controlling shareholder of the Company holding 20% of the existing issued share capital of the Company and the sole ultimate beneficial owner of the Subscriber is Mr. Lam, who is an executive Director and the controlling shareholder of the Company. The Subscriber is therefore a connected person of the Company and the Subscription constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules, which is subject to the reporting, announcement and Independent Shareholders'approval requirements.

An Independent Board Committee has been formed to advise the Independent Shareholders and the Independent Financial Adviser has been appointed to advise the Independent Board Committee and the Independent Shareholders in respect of the Subscription Agreement.

An EGM will be held to consider and if thought fit, to approve the Subscription Agreement and the transactions contemplated thereunder. The Subscriber and its associates are required to abstain from voting on the resolutions to be proposed at the EGM.

A circular containing, inter alia, further information regarding the Subscription Agreement and a notice of EGM will be despatched to the Shareholders as soon as practicable in accordance with the Listing Rules, which is currently expected to be on or before 28 September 2017.

THE SUBSCRIPTION AGREEMENT

Date

7 September 2017

Parties

Issuer : the Company

Subscriber : Space Management Limited

The Subscriber is the controlling shareholder of the Company holding 20% of the existing issued share capital of the Company as at the date of this announcement.

The Subscriber is a company incorporated under the laws of the British Virgin Islands. It is an investment holding company, the sole investment of which is its interest in the Company. The sole ultimate beneficial owner of the Subscriber is Mr. Lam, who is an executive Director and the controlling shareholder of the Company.

Subscription

Subject to the fulfillment of the conditions set out below in the section headed ''Conditions Precedent'', the Company has agreed to issue, and the Subscriber has agreed to subscribe for, the PSCS in the principal amount of HKD50,000,000 convertible into Conversion Shares at the initial Conversion Price of HKD3.54 per Conversion Share (subject to adjustments) in two tranches at the face value of HKD30,000,000 and HKD20,000,000 respectively. For the avoidance of doubt, the Distribution shall not lead to any adjustment of the Conversion Price.

The Conversion Price was arrived at after arm's length negotiations between the Company and the Subscriber taking into account the average closing price of the Shares for the 5 trading days, 10 trading days, 30 trading days, 60 trading days and 90 trading days prior to the date of the Subscription Agreement. The Conversion Price represents:

1. a premium of approximately 30% to the closing price of HKD2.72 per Share as quoted on the Stock Exchange on the Last Trading Day;

2. a premium of approximately 29% to the average of the closing prices of approximately HKD2.74 per Share for the 5 trading days of the Shares up to and including the Last Trading Day;

3. a premium of approximately 30% to the average of the closing prices of approximately HKD2.72 per Share for the 10 trading days of the Shares up to and including the Last Trading Day;

4. a premium of approximately 32% to the average of the closing prices of approximately HKD2.69 per Share for the 30 trading days of the Shares up to and including the Last Trading Day;

5. a premium of approximately 33% to the average of the closing prices of approximately HKD2.66 per Share for the 60 trading days of the Shares up to and including the Last Trading Day;

6. a premium of approximately 37% to the average of the closing prices of approximately HKD2.59 per Share for the 90 trading days of the Shares up to and including the Last Trading Day;

7. a premium of approximately 168% to the audited net asset value per Share of approximately HKD1.32, which is calculated based on the audited net asset value of the Company of approximately HKD582,505,000 as at 31 December 2016 as stated in its 2016 annual report divided by its total number of 440,000,000 issued Shares as at 31 December 2016.

Assuming the exercise in full of the conversion rights attaching to the PSCS at the initial Conversion Price, a total of 14,124,293 Conversion Shares may be issued, representing approximately 3.21% of the existing issued share capital of the Company and approximately 3.11% of the issued share capital of the Company as enlarged by the Conversion.

The Conversion Shares will be allotted and issued under the general mandate granted to the Directors by a resolution of the Shareholders passed at the Company's annual general meeting held on 26 June 2017 pursuant to which the Directors were allowed to allot and issue up to 88,000,000 Shares. As at the date of this announcement, no Shares have been issued and allotted pursuant to such general mandate.

Conditions Precedent

Completion is conditional upon the fulfillment of the following conditions before the Long Stop Date:

1. the Independent Shareholders having approved the Subscription Agreement and the transaction contemplated therein in the EGM; and

2. the Listing Committee of the Stock Exchange having granted the listing of and permission to deal in the Conversion Shares.

If any of the above conditions precedent is not fulfilled on or before the Long Stop Date, the Subscription Agreement shall be terminated and become null and void and none of the parties shall have any claim against the other for any costs or losses (save for any antecedent breaches).

The First Completion shall take place on the 7th Business Day following the date on which all the above conditions precedent (or such other date as may be agreed in writing between the Company and the Subscriber). The Subscriber shall pay the principal amount of HKD30,000,000 to the Company for the first tranche of the PSCS.

The Second Completion shall take place on the 7th Business Day following the date of the notice served by the Company, exercising its right at its sole discretion within 5 years from the First Completion, on the Subscriber (or such other date as may be agreed in writing between the Company and the Subscriber) calling for the Subscriber to subscribe for the second tranche of the PSCS at the principal amount of HKD20,000,000.

Warranties and Undertakings

The Company has given customary warranties and undertakings to the Subscriber under the Subscription Agreement.

Termination

The Subscription Agreement shall terminate:

1. if any of the conditions precedent has not been fulfilled by the Long Stop Date; or

2. by agreement between the Company and the Subscriber prior to the First Completion.