Global Market : Director Dealing and Agreement with China Everbright

Director Dealing and Agreement with China Everbright

1 December 2014

Global Market Group Limited

Director Dealing and Agreement with China Everbright

Global Market Group Limited (the "Company") (AIM: GMC) announces a director dealing as a result of Global Marketing Group Limited ("GM Group") agreeing to transfer in aggregate 4,449,226 shares in the capital of the Company to Accurate Global Limited ("AGL") and Advanced Orient Limited ("AOL"). The transfer is expected to complete in mid-December 2014.

GM Group is wholly owned by a director of the Company, Mr. Pan Weijia ("Mr. Pan"), and currently holds 16,539,372 shares in the capital of the Company (17.72% of the Company's issued share capital). Mr. Pan also has a direct and indirect, beneficial interest in a further 14,448,504 shares (15.48% of the Company's issued share capital) and an indirect non-beneficial interest in 24,385,154 shares (26.13% of the Company's issued share capital).

AOL is a wholly owned subsidiary of China Everbright Limited ("China Everbright") and AGL is wholly owned by China Special Opportunities Fund III, which is managed by China Everbright Investment Management Limited, a wholly owned subsidiary of China Everbright. AOL and AGL currently hold in aggregate 4,050,773 shares (4.34% of the Company's issued share capital). 

Background

Prior to the IPO process, the Company received private funding from several third party investors, including China Everbright which invested, through AGL and AOL, approximately USD7m in the Company under two share sale and purchase agreements with GM Group (the "S&P Agreements").  Under the S&P Agreements, GM Group sold certain preferred shares in the share capital of the Company at that time to AGL and AOL respectively. The S&P Agreements gave AGL and AOL the right to require GM Group to repurchase the shares of the Company held by AGL and AOL upon the occurrence of certain events.  AGL and AOL exercised such rights under the S&P Agreements and served a put option notice on GM Group on 13 June 2013, requiring GM Group to purchase certain of their shareholdings in the Company.  This put option was not satisfied by GM Group. GM Group, AGL and AOL have recently reached agreement, as outlined below, on dealing with the satisfaction of the put option rights under the S&P Agreements. 

Changes in Shareholdings

The parties have agreed that around mid-December 2014, GM Group will transfer 2,999,604 shares and 1,449,622 shares (together, the "Subject Shares") (in aggregate, 4.47% of the Company's issued share capital) to AGL and AOL respectively (the "Share Transfers"). After completion of the Share Transfers, GM Group's shareholding in the Company will decrease from 16,539,372 shares to 12,090,146 shares (17.72% to 12.96%). As a consequence, Mr Pan's beneficial direct and indirect interest will decrease from 30,987,876 shares to 26,538,650 shares (33.20% to 28.43%). The shareholdings of AGL and AOL will increase from 2,730,972 shares to 5,730,576 shares (2.93% to 6.14%) and from 1,319,801 shares to 2,769,423 shares (1.41% to 2.97%) respectively.

Call Options

The parties have also agreed that each of AGL and AOL will grant to GM Group a call option (together, the "Call Options") such that GM Group shall have the right to purchase from AGL or AOL at any time during the 24-month period after the date of the S&P Agreements (the "Call Option Period") a certain maximum number of shares in the Company and at an agreed price.  If the Call Options are fully exercised and assuming that there is no change in the issued share capital of the Company and that GM Group does not increase or decrease its shareholding in the Company other than as a result of the exercise of the Call Options, upon completion of the full exercise of the Call Options, GM Group's shareholding in the Company will be restored from 12.96% to 17.72%.

The Call Options shall lapse and terminate and cease to be exercisable upon the expiry of the Call Option Period. If, however, before the expiry of the Call Option Period, the shares of the Company or the shares of any holding company of the Company are successfully listed on any other stock exchange other than AIM in whatever form (the "Listing"), then the Call Options shall immediately terminate, expire and cease to be exercisable.

Undertakings and Restrictions

Each of GM Group and Mr. Pan has undertaken that prior to the occurrence of certain events, including the full exercise by GM Group of its right to the Call Options, or AGL or AOL having disposed of a number of the shares of the Company equivalent to the number of the relevant Subject Shares, GM Group and Mr. Pan shall not (a) accept any share options or similar securities granted by the Company; or (b) increase their equity interest (whether in the form of options, warrants or other similar securities) in the Company other than by purchasing the relevant Subject Shares from AGL and AOL pursuant to the exercise of the Call Options.

After the lapse, expiry or termination of the Call Options, GM Group and/or Mr. Pan may (a) accept share options in the Company (if so granted by the Company) and (b) increase their equity interest in the Company by purchasing from any other third parties, provided that GM Group and/or Mr. Pan shall give AGL and AOL the right of first refusal to sell their shares in the Company.

Appointment of Director

The parties have also agreed that GM Group and Mr Pan shall propose to the board of directors of the Company (the "Board") to appoint a candidate nominated jointly by AGL and AOL (the "Nominee") as a director of Guangzhou Longfei Software Technology Co., Ltd. ("Guangzhou Longfei"), a subsidiary of the Company that owns certain online trading business, including a website called FeiFei.com ("Longfei Business"). This appointment will be subject to the Board's approval having considered the background and experience of the Nominee, as well as the suitability of the appointment. The appointment, however, will terminate if one of several events occurs, including the full exercise by GM Group of its right to the Call Options, or AGL or AOL having disposed of a number of the shares of the Company equivalent to the number of the relevant Subject Shares, or the listing of Guangzhou Longfei or any holding company of Guangzhou Longfei or the Longfei Business on any stock exchange. 

Enquiries:

David Ling/ Cheandy Hu/ Mophy Fan 

Global Market Group Limited: [phone]

Philip Secrett/ Maureen Tai/ Jen Clarke

Grant Thornton UK LLP, Nominated Adviser: [phone]

Martin Davison

Westhouse Securities Limited, Broker: [phone]