Steering : DISCLOSEABLE TRANSACTION DISPOSAL OF ENTIRE EQUITY INTEREST IN A SUBSIDIARY

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Steering Holdings Limited

旭 通 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 1826)

DISCLOSEABLE TRANSACTION

DISPOSAL OF ENTIRE EQUITY INTEREST IN A SUBSIDIARY

THE DISPOSAL

The Board announces that on 30 March 2021 (after trading hours), the Vendor, an indirect wholly owned subsidiary of the Company, the Purchaser and the Disposal Company entered into the Share Transfer Agreement, pursuant to which the Vendor agreed to sell to the Purchaser, and the Purchaser agreed to acquire from the Vendor, 100% equity interest in the Disposal Company for a consideration of RMB1.00 (equivalent to approximately HK$1.19) in accordance with the terms and conditions thereof. Completion has taken place immediately upon signing of the Share Transfer Agreement.

LISTING RULES IMPLICATION

Given that one of the applicable percentage ratios under Rule 14.07 of the Listing Rules in respect of the Disposal exceeds 5% but is less than 25%, the Disposal constitutes a discloseable transaction of the Company, and is subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

THE DISPOSAL

The Board announces that on 30 March 2021 (after trading hours), the Vendor, an indirect wholly owned subsidiary of the Company, the Purchaser and the Disposal Company entered into the Share Transfer Agreement, pursuant to which the Vendor agreed to sell to the Purchaser, and the Purchaser agreed to acquire from the Vendor, 100% equity interest in the Disposal Company at the consideration of RMB1.00 (equivalent to approximately HK$1.19).

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THE SHARE TRANSFER AGREEMENT

Set forth below are the major terms of the Share Transfer Agreement:

Date:	30 March 2021 (after trading hours)
Parties:	(1) the Vendor as the vendor;
	(2) the Purchaser as the purchaser; and
	(3) the Disposal Company.
	To the best of the knowledge, information and belief of
	the Directors having made all reasonable enquiries, the
	Purchaser is an Independent Third Party.
Assets to be disposed of:	The 100% equity interest in the Disposal Company which
	in turn holds 51% equity interest in Shangrao Hongmiao,
	which in turn holds 100% equity interest in Shenzhen
	Dafy and Beijing Dafy, and has effective control over the
	finance, operation and assets of OPCO.
Consideration:	RMB1.0 (equivalent to approximately HK$1.19), which
	shall be settled immediately upon signing of the Share
	Transfer Agreement.
	The Consideration was determined after arm's length
	negotiations between the Purchaser and the Vendor.
	Having considered that (1) the net liabilities of the
	Disposal Group as at 31 December 2020 is approximately
	HK$109.2 million; (2) the appraised fair value of the
	Disposal Group as assessed by an independent valuer is
	HK$ nil as at 31 December 2020; and (3) the Group has
	ceased its loan facilities services, the Directors considered
	that the Consideration is fair and reasonable and in the
	interests of the Company and the Shareholders as a whole.
Completion:	Completion shall take place (and has taken place)
	immediately upon signing of the Share Transfer
	Agreement.

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INFORMATION OF THE PARTIES

1. The Disposal Company
   The Disposal Company is an indirect wholly owned subsidiary of the Company. It is a limited liability company established in the PRC. The Disposal Company principally engages in the provision of computer information network, electronic technology development consulting and advertising. The Disposal Group carries out the loan facilitation business of the Group in the PRC.
   Set out below is the financial information of the Disposal Group for the financial years ended 31 December 2019 and 2020:

	For the year ended
	31 December
	2020	2019
	(audited)	(audited)
	HK$ million	HK$ million
Revenue	16.3	746.6
Gross (loss)/profit	(4.7)	539.9
Net (loss)/profit before taxation	(321.0)	257.5

As disclosed in the Announcement, the book value of the total assets and net liabilities of the Disposal Group as at 31 December 2020 was approximately HK$73.1 million and approximately HK$109.2 million, respectively.

1. The Vendor
   The Vendor is an indirect wholly owned subsidiary of the Company. It is a limited liability company incorporated under the laws of Hong Kong. Immediately before the Disposal, the Vendor holds 100% of the equity interest in the Disposal Company.
2. The Purchaser
   The Purchaser, Zhang Jin* (張錦), is an individual. As informed by the Purchaser, he has been participating in asset management in China over 10 years and has experience in recovering value in non-preforming assets in the PRC. To the best of the Director's knowledge, information and belief having made all reasonable enquiry, the Purchaser is an Independent Third Party.

INFORMATION OF THE COMPANY

The Company is an investment holding company principally engaged in the provision of financial information and technology services. The Company operates its business through three segments namely, the financial information and technology services segment, the contracting services segment and the consultancy services segment.

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REASONS FOR AND BENEFITS OF THE DISPOSAL

As explained in the Announcement, in order to address the issues giving rise to the disclaimer opinion given by the auditor, it is the Group's plan to dispose of the Disposal Group. Please refer to the section headed ''Management Response and the Board's plans/ actions to Disclaimer Opinion'' in the Announcement for details.

As disclosed in the Announcement, the management of the Group and the auditor have come to a consensus that, with the Disposal, the qualifications relating to other receivables, deposits and prepayments and income tax expense and tax payable will be automatically removed in the following year.

Based on the Board's understanding and according to the new trading suspension requirement, if the Group is unable to resolve the issues giving rise to the disclaimer opinion, trading of the Company's shares will be suspended. The Board considered that the suspension of trading of the shares of the Company and any prolongment thereof may adversely affect the interests of the Company and the Shareholders as a whole.

As disclosed in the Announcement, in November 2020, the China Banking and Insurance Regulatory Commission officially announced the end of China's internet financial peer-to- peer lending (P2P) sector, leading to the cessation of business of all operating platforms. The Loan Facilitation business of the Company, which is operated by the Disposal Group, has also been affected by the above as well as the impact of the coronavirus pandemic leading to a plunge in the usage of the Group's financial information and technology services in the first half of the year. As such, impairment on receivables including intermediary commissions and prepayments of approximately HK$290.9 million have been made for the year ended 31 December 2020 and the Disposal Group had net liabilities of approximately HK$109.2 million as at 31 December 2020.

The Board considered that the Disposal offers an opportunity to improve the financial position of the Group and is a solution to address the issues giving rise to the disclaimer opinion by the auditor.

Based on the above, the Directors are of the view that the Disposal would benefit the Group and consider the terms of the Share Transfer Agreement are on normal commercial terms, fair and reasonable and the Disposal is in the interests of the Company and the Shareholders as a whole.

FINANCIAL EFFECTS OF THE DISPOSAL

Upon Completion, the Disposal Group will cease to be subsidiaries of the Company and its financial results, assets and liabilities will no longer be consolidated into the financial statements of the Group.

As the total consideration receivable is RMB1.00 (equivalent to approximately HK$1.19) under the Disposal, there is no material proceed from the Disposal.

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It is estimated that the gain on disposal of the equity interests in the Disposal Group calculated in accordance with the HKFRSs would be approximately HK$71.7 million, comprising the Consideration less the carrying value and exchange reserve of the Disposal Group and after deducting the expenses directly attributable to the Disposal.

Given the above net gain on disposal to the Group, the consolidated net asset value attributable to the Shareholders is preliminarily estimated to increase by approximately HK$71.7 million upon Completion.

LISTING RULES IMPLICATION

Given that one of the applicable percentage ratios under Rule 14.07 of the Listing Rules in respect of the Disposal exceeds 5% but is less than 25%, the Disposal constitutes a discloseable transaction of the Company, and is subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

DEFINITIONS

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

''Announcement''	the annual results announcement for the year ended 31
	December 2020 of the Group dated 30 March 2021
''Beijing Dafy''	Beijing Yunyang Dafy Technology Company Limited* (北
	京雲揚達飛科技有限公司), a company established under the
	laws of the PRC with limited liability and an indirect non-
	wholly-owned subsidiary of the Company immediately prior
	to Completion
''Board''	the board of directors of the Company
''Business Day(s)''	any day other than Saturday, Sunday and days on which
	banks are not open for business under the laws and
	regulations of the PRC
''Company''	Steering Holdings Limited (旭通控股有限公司) (stock code:
	01826), a company incorporated in the Cayman Islands with
	limited liability, the issued shares of which are listed on the
	Main Board of the Stock Exchange
''Completion''	completion of the Disposal in accordance with the Share
	Transfer Agreement
''connected person(s)''	has the meaning ascribed to it under the Listing Rules
''Consideration''	RMB1.00, being the consideration payable by the Purchaser
	to Vendor under the Share Transfer Agreement
''Director(s)''	director(s) of the Company

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''Disposal''

''Disposal Company''

''Disposal Group''

''Equity Interest''

''Group'' ''HK$'' ''HKFRSs''

''Hong Kong''

''Independent Third Party''

''Listing Rules''

''OPCO''

the disposal by the Vendor of the Equity Interest subject to and upon the terms and conditions of the Share Transfer Agreement

Shanghai Faye Yu Technology Company Limited (上海飛毓 科技有限公司), a limited liability company incorporated under the laws of the PRC

the Disposal Company together with its subsidiaries, namely, Beijing Dafy, Shenzhen Dafy and OPCO

100% of the equity interest of the Disposal Company held by the Vendor

the Company and its subsidiaries

Hong Kong Dollars, the lawful currency of Hong Kong

the Hong Kong Financial Reporting Standards issued by the Hong Kong Institutes of Certified Public Accountants

the Hong Kong Special Administrative Region of the Peoples' Republic of China

person(s) or company(ies) which is/are independent of and not connected with the Company and its connected persons

the Rules Governing the Listing of Securities on the Stock Exchange

Shenzhen Qianhai Weiyuan Zhicheng Operation Management Technology Co., Ltd* (深圳前海微遠 至誠 運營 管理科技有限公司), a company established in the PRC with limited liability. By virtue of a variable interest entity structure established through a series of agreement, it is treated as a subsidiary of the Company

''PRC''	the People's Republic of China, which for the purpose of
	this announcement, excludes Hong Kong, the Macau Special
	Administrative Region of the People's Republic of China
	and Taiwan
''Purchaser''	Zhang Jin* (張錦), an Independent Third Party
''RMB''	Renminbi, the lawful currency of the PRC
''Share Transfer Agreement''	the share transfer agreement dated 30	March 2021 in
	relation to the Disposal entered into between the Vendor,
	the Purchaser and the Disposal Company

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''Shenzhen Dafy''	Shenzhen Yunteng Dafy Technology Company Limited* (深
	圳雲騰達飛科技有限公司), a company established under the
	laws of the PRC with limited liability and an indirect non-
	wholly-owned subsidiary of the Company immediately prior
	to Completion
''Shareholders''	shareholder(s) of the Company
''Stock Exchange''	The Stock Exchange of Hong Kong Limited
''Vendor''	Jet Speed Asia Pacific Limited (創捷亞太有限公司), an
	indirect wholly owned subsidiary of the Company and a
	limited liability company incorporated under the laws of
	Hong Kong
''%''	per cent.
	By order of the Board
	Steering Holdings Limited
	Feng Xuelian
	Executive Director
Hong Kong, 30 March 2021

The English transliteration of the Chinese name(s) in this announcement, where indicated with ''*'', is/are included for information purpose only, and should not be regarded as the official English name(s) of such Chinese name(s).

In this announcement, for the purpose of illustration only, amounts quoted in RMB have been converted into HK$ at the rate of RMB1.00 to HK$1.19. Such exchange rate has been used, where applicable, for the purpose of illustration only and does not constitute a representation that any amounts were or may have been exchanged at this or any other rates or at all.

As at the date of this announcement, the executive Directors are Ms. Feng Xuelian and Mr. Ng Kin Siu (chief executive officer); the non-executive Director is Mr. Gao Yunhong; and the independent non-executive Directors are Mr. Chan Yuk Sang, Mr. Wan Chi Wai Anthony and Mr. Lau Kwok Fai Patrick.

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