CHINA SCE PROPERTY : ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL IN TARGET COMPANY

E155154A_China SCE 1..6

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CHINA SCE PROPERTY HOLDINGS LIMITED

中 駿 置 業 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1966)

DISCLOSEABLE AND CONNECTED TRANSACTION: ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL IN TARGET COMPANY

THE ACQUISITION

On 12 January 2016, Polytic, an indirect wholly-owned subsidiary of the Company, entered into the SP Agreement with the Vendor in relation to the acquisition of the entire issued share capital of the Target Company by Polytic for a consideration of RMB207.37 million. Upon completion of the Acquisition, (i) the Target Company will become an indirect wholly-owned subsidiary of the Company; and (ii) the Group's equity interest in Quanzhou Puxi will increase from 51% to 100%, while the Vendor will cease to hold any equity interest in the Target Company and Quanzhou Puxi.

LISTING RULES IMPLICATIONS

Since the relevant applicable percentage ratio in respect of the Acquisition is more than 5% but less than 25%, the Acquisition constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules.

As the Vendor is a substantial shareholder (as defined in the Listing Rules) of Quanzhou Puxi by virtue of controlling over 10% of the voting power at general meetings of Quanzhou Puxi through its interest in the entire issued share capital in Puxi Holdings and the Target Company prior to the completion of the Acquisition, the Vendor is a connected person (as defined in the Listing Rules) of the Company at the subsidiary level, and the Acquisition constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules.

By virtue of Rule 14A.101 of the Listing Rules, as (i) the Vendor is a connected person of the Company at the subsidiary level; (ii) the Acquisition is on normal commercial terms; (iii) the Board has approved the Acquisition; and (iv) the Directors, including the independent non-executive Directors, have confirmed that the terms of the Acquisition are fair and reasonable, and the transactions contemplated thereunder are on normal commercial terms and in the ordinary and usual course of business of the Group, and in the interests of the Company and its shareholders as a whole, the Acquisition is subject to the reporting and announcement requirements but is exempted from the circular, independent financial advice and shareholders' approval requirements under Chapter 14A of the Listing Rules.

The Board hereby announces that on 12 January 2016, Polytic, an indirect wholly-owned subsidiary of the Company, entered into the SP Agreement with the Vendor in relation to the acquisition of the entire issued share capital of the Target Company by Polytic on the principal terms and conditions as set out below:

ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL IN TARGET COMPANY

SP Agreement Date

12 January 2016

Parties

1. Polytic, an indirect wholly-owned subsidiary of the Company, as purchaser; and

   
   

2. the Vendor, as vendor. To the best of the Directors' knowledge, information and belief having made all reasonable enquiry, save in respect of its interest in the entire issued share capital of the Target Company, which in turn holds the entire issued share capital of Puxi Holdings which in turn holds 49% of the equity interest in Quanzhou Puxi, the Vendor and its ultimate beneficial owner(s) is independent of the Company and its connected persons. As the Vendor is a substantial shareholder (as defined in the Listing Rules) of Quanzhou Puxi by virtue of controlling over 10% of the voting power at general meetings of Quanzhou Puxi through its interest in the entire issued share capital in Puxi Holdings and the Target Company prior to the completion of the Acquisition, the Vendor is a connected person (as defined in the Listing Rules) of the Company at the subsidiary level.

Assets to be acquired

Under the SP Agreement, Polytic has agreed to acquire, and the Vendor has agreed to sell, the entire issued share capital in the Target Company. As at the date of this announcement, the principal assets of the Target Company comprise the 49% equity interest in Quanzhou Puxi.

Consideration

Pursuant to the SP Agreement, the consideration for the Acquisition shall be RMB207.37 million, which shall be payable in cash by the Group by 15 January 2016.

The consideration was determined after arm-length's negotiations between the Group and the Vendor with reference to (i) the net asset value of the Target Company before the Acquisition of approximately RMB316,000; (ii) a shareholder's loan of RMB166.60 million due by the Target Company to a shareholder of the Vendor; (iii) recent market value of comparable properties at Quanzhou; and (iv) the percentage of equity interest of Quanzhou Puxi held by the Vendor. According to the information provided by the Vendor, the Vendor's original acquisition cost of the entire issued capital of the Target Company was US$49,000.

The consideration payable by Polytic for the Acquisition will be financed by the internal resources of the Group.

Completion of the Acquisition

Under the SP Agreement, the parties shall procure the approval and change of registration for the transfer as contemplated under the SP Agreement with the relevant authorities.

Upon completion of the Acquisition, (i) the Target Company will become an indirect wholly-owned subsidiary of the Company; and (ii) the Group's equity interest in Quanzhou Puxi will increase from 51% to 100%, while the Vendor will cease to hold any equity interest in the Target Company and Quanzhou Puxi.

GENERAL INFORMATION ON THE GROUP AND THE VENDOR

The Group is principally engaged in property development, property investment and property management in the PRC.

The Vendor is a limited liability company established in the British Virgin Islands and is principally engaged in investment holding (including the holding of the Target Company, Puxi Holdings and Quanzhou Puxi as investments immediately before the completion of the Acquisition). Quanzhou Puxi is an indirect non-wholly-owned subsidiary of the Company pursuant to the applicable financial reporting standards and is principally engaged in the business of property development in Quanzhou, the PRC.

Set out below is the net profit (both before and after tax) of the Target Company for the years ended 31 December 2013 and 31 December 2014 according to the management accounts of the Target Company:

For the year ended 31 December 2013

For the year ended 31 December 2014

RMB million RMB million

Net profit/(loss) before tax (9) 176

Net profit/(loss) after tax (9) 176

REASONS FOR AND BENEFITS OF THE ACQUISITION

Quanzhou Puxi is principally engaged in property development projects of high-rise residential, office and retail shops, namely ''The Regent'' and ''International Finance Centre'' located in southern part of Baozhou Road East section, Quanzhou, the PRC. The Company considers that the Acquisition will enable the Group to have greater flexibility in the management of these property development projects which can in turn achieve greater economic efficiency and development potential.

The Directors (including the independent non-executive Directors) consider that the terms of the SP Agreement (including the consideration thereof) are fair and reasonable, and the transactions contemplated thereunder are on normal commercial terms and in the ordinary and usual course of business of the Group, and in the interest of the Company and its shareholders as a whole.

LISTING RULES IMPLICATION

Since the relevant applicable percentage ratio in respect of the Acquisition is more than 5% but less than 25%, the Acquisition constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules.

As the Vendor is a substantial shareholder (as defined in the Listing Rules) of Quanzhou Puxi by virtue of controlling over 10% of the voting power at general meetings of Quanzhou Puxi through its interest in the entire issued share capital in Puxi Holdings and the Target Company prior to the completion of the Acquisition, the Vendor is a connected person (as defined in the Listing Rules) of the Company at the subsidiary level, and the Acquisition constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules.

By virtue of Rule 14A.101 of the Listing Rules, as (i) the Vendor is a connected person of the Company at the subsidiary level; (ii) the Acquisition is on normal commercial terms;

(iii) the Board has approved the Acquisition; and (iv) the Directors, including the independent non-executive Directors, have confirmed that the terms of the Acquisition are fair and reasonable, and the transactions contemplated thereunder are on normal commercial terms and in the ordinary and usual course of business of the Group, and in the interests of the Company and its shareholders as a whole, the Acquisition is subject to the reporting and announcement requirements but is exempted from the circular, independent financial advice and shareholders' approval requirements under Chapter 14A of the Listing Rules.