Greentown China : CONNECTED TRANSACTION JOINT VENTURE ARRANGEMENT IN RESPECT OF DEVELOPMENT OF HUZHOU ANJI PROJECT

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.

GREENTOWN CHINA HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 03900)

CONNECTED TRANSACTION

JOINT VENTURE ARRANGEMENT IN RESPECT OF

DEVELOPMENT OF HUZHOU ANJI PROJECT

On 24 December 2019, Greentown Town (a wholly-owned subsidiary of the Company), Zhejiang Yinrun, Zhejiang Bluetown (an associate of Mr Song and hence a connected person of the Company), Ningbo Lanyou, Ningbo Lanzhen and Bluetown Town Zhiyuan entered into the Share Transfer and Cooperation Agreement in relation to the Target Company.

Pursuant to the Share Transfer and Cooperation Agreement, Greentown Town agreed to acquire the Target Shares, representing 40% of the total shares of the Target Company as at the date of the Share Transfer and Cooperation Agreement, for an aggregate amount of not exceeding RMB420,183,860 payable by Greentown Town in accordance with the Share Transfer and Cooperation Agreement, including a consideration of not exceeding RMB390,183,860 and a financial assistance of not exceeding RMB30,000,000. The purpose of the Share Transfer and Cooperation Agreement is to set out the terms of cooperation among the JV Partners for the development of the Huzhou Anji Project.

As at the date of this announcement, the Target Company is 35% owned by Zhejiang Bluetown, which is in turn 66.5% owned by Bluetown. Bluetown is a company established in the PRC and is owned by Mr Song as to over 30% shareholding. Therefore, each of Bluetown, Zhejiang Bluetown and the Target Company is an associate of Mr Song under rule 14A.12(1)(c) of the Listing Rules and a connected person of the Company.

As one or more of the applicable percentage ratios (as defined in the Listing Rules) exceed 0.1% and all of them are less than 5%, the entering into of the Share Transfer and Cooperation Agreement and the transactions contemplated thereunder will constitute a connected transaction of the Company subject to the reporting and announcement requirements but exempt from independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

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INTRODUCTION

The Board announces that on 24 December 2019, Greentown Town (a wholly-owned subsidiary of the Company), Zhejiang Yinrun, Zhejiang Bluetown (an associate of Mr Song and hence a connected person of the Company), Ningbo Lanyou, Ningbo Lanzhen, Bluetown Town Zhiyuan entered into the Share Transfer and Cooperation Agreement in relation to the Target Company, pursuant to which Greentown Town agreed to acquire the Target Shares, representing 40% of the total shares of the Target Company as at the date of the Share Transfer and Cooperation Agreement, for an aggregate amount of not exceeding RMB420,183,860 payable by Greentown Town in accordance with the Share Transfer and Cooperation Agreement, including a consideration of not exceeding RMB390,183,860 and a financial assistance of not exceeding RMB30,000,000.

SHARE TRANSFER AND COOPERATION AGREEMENT

Principal terms of the Share Transfer and Cooperation Agreement are set out below:

Date	:	24 December 2019
Parties	:	(1)	Greentown Town;
		(2)	Zhejiang Yinrun;
		(3)	Zhejiang Bluetown;
		(4)	Ningbo Lanyou;
		(5)	Ningbo Lanzhen; and
		(6)	Bluetown Town Zhiyuan.
		To the best of the knowledge, information and belief of
		the Directors, having made all reasonable enquiries, each
		of Zhejiang Yinrun, Ningbo Lanyou, Ningbo Lanzhen
		and Bluetown Town Zhiyuan and their respective ultimate
		beneficial owners is a third party independent from the
		Company and its connected persons (save for Mr Song,
		who indirectly owns less than 0.1% of the equity interest
		in Bluetown Town Zhiyuan). Zhejiang Bluetown is a
		connected person of the Company.
Subject matter	:	Greentown Town agreed to purchase, and Zhejiang Yinrun
		as legal and beneficial owner of the Target Shares agreed
		to sell the Target Shares. The Target Shares represent 40%
		of the total shares of the Target Company and such shares
		have a registered capital of RMB40,000,000. The purpose
		of the Share Transfer and Cooperation Agreement is to set
		out the terms of cooperation among the JV Partners for
		the development of the Huzhou Anji Project.

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		Upon completion of the Acquisition, the Target Company
		will be owned by Greentown Town, Zhejiang Bluetown,
		Ningbo Lanyou, Ningbo Lanzhen, Zhejiang Yinrun, and
		Bluetown Town Zhiyuan as to 40%, 35%, 10%, 9%, 5%,
		and 1%, respectively.
		According to the Share Transfer and Cooperation
		A g r e e m e n t , t h e T a r g e t S h a r e s , r e p r e s e n t i n g
		RMB40,000,000 in the registered capital of the Target
		Company, will continue to be charged in favour of
		Bluetown Town Zhiyuan to secure certain debts owed by
		the Target Company to Bluetown Town Zhiyuan.
Amount payable	:	Pursuant to the terms of the Share Transfer and
		Cooperation Agreement, the aggregate consideration
		to be paid by Greentown Town shall not exceed
		RMB390,183,860, a summary of which is as follows:
		(a) an initial consideration of RMB320,000,000
		for the transfer of the Target Shares (of which
		RMB56,526,100 shall be payable to the Target
		Company for the repayment of the loan owed by
		Zhejiang Yinrun to the Target Company) (the
		" Initial Consideration") . Among the Initial
		Consideration, RMB5,000,000 of which is payable
		within 7 business days after the day on which
		all conditions precedent are satisfied (subject to
		waiver, where applicable), while the balance of
		which is payable within 10 business days after (i)
		the completion of registration of the transfer of
		the Target Shares and of the amended and restated
		articles of association with the industrial and
		commercial authorities and (ii) the appointment of
		directors and management pursuant to the terms and
		provisions of the Share Transfer and Cooperation
		Agreement;
		(b) in view of the Changshuo Street Land Parcel
		acquired by the Target Company on 26 November
		2019, an additional consideration of RMB26,470,860
		shall be payable by Greentown Town to Zhejiang
		Yinrun in a manner to be specified by the parties to
		the agreement (the "Changshuo Street Land Parcel
		Consideration"); and

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1. in the event that the Target Company successfully acquires the 72.855 mu Land Parcel, a further

a d d i t i o n a l c o n s i d e r a t i o n o f a n a m o u n t n o t exceeding RMB43,713,000 shall be payable by Greentown Town within 30 days from the date of the successful land bid (the "72.855 mu Land Parcel Consideration", together with the Initial Consideration and the Changshuo Street Land Parcel Consideration, the "Total Consideration").

		The amount of the Total Consideration was agreed after
		arm's length negotiations among the JV Partners having
		considered, among other things, the prospect and the
		development needs of the Huzhou Anji Project, the
		valuation of the Target Company and its working capital
		requirements.
		The Group intends to finance the aforesaid amount by
		internal financial resources.
Financial assistance	:	As at 31 October 2019, the Target Company has
		(i) advanced a loan to Zhejiang Bluetown in the
		principal amount of RMB525,300,000; (ii) advanced
		a loan to Zhejiang Yinrun in the principal amount of
		RMB56,526,100; and (iii) charged certain parcels of
		land to secure a loan owed by an associate of Zhejiang
		Bluetown in the amount of RMB272,500,000. According
		to the Share Transfer and Cooperation Agreement: in
		respect of (i), Zhejiang Bluetown shall repay the aforesaid
		loan and related interests to the Target Company before 3
		July 2020; in respect of (ii), Zhejiang Yinrun shall repay
		the aforesaid loan by way of payment of part of the Initial
		Consideration to the Target Company; and in respect of
		(iii), Zhejiang Bluetown shall complete the release of such
		charge two months prior to the Target Company applying
		for the development loan or handling other development
		process.
		In addition, the Zhejiang Yinrun and Ningbo Lanyou owe
		certain payables to the Target Company in the amount of
		RMB2,843,680. Each of them shall repay such amount
		within 7 business days from the date of the Share Transfer
		and Cooperation Agreement.

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		In the event that the Target Company requires additional
		funding, the shareholders of the Target Company (other
		than Ningbo Lanyou, Ningbo Lanzhen and Bluetown
		Town Zhiyuan) shall provide shareholders' loans to the
		Target Company, for the daily operation and management
		of the Target Company. The amount of shareholders'
		loan to be provided by Greentown Town to the Target
		Company shall not exceed RMB30,000,000 unless
		otherwise agreed by Greentown Town. According to
		the Share Transfer and Cooperation Agreement, each of
		Ningbo Lanyou, Ningbo Lanzhen and Bluetown Town
		Zhiyuan will not be obligated to provide any additional
		funding other than the registered capital.
		Shareholders' loans provided to the Target Company shall
		be repayable by the Target Company with interest at a
		daily accrual rate of 9% per annum subject to the terms
		and provisions of the Share Transfer and Cooperation
		Agreement. For any failure to provide the relevant
		shareholders' loan in a timely manner in accordance
		with the terms and provisions of the Share Transfer and
		Cooperation Agreement, the losses incurred therefrom
		by the Target Company shall be borne by the defaulting
		party.
Conditions precedent	:	Completion of the transactions contemplated under the
		Share Transfer and Cooperation Agreement is conditional
		upon the satisfaction of the conditions precedent or, where
		applicable, waiver by Greentown Town. A summary of
		the conditions precedent is as follows:
		(a) the Share Transfer and Cooperation Agreement
		comes into effect;
		(b) all necessary approval, consents and resolutions
		have been obtained or passed by Zhejiang Yinrun in
		accordance with its constitutional documents;
		(c) all necessary approval, permits, consents and
		authorisations pursuant to the Listing Rules and
		other applicable laws and regulations (if required)
		have been obtained by Greentown Town (including
		the approval from the independent Shareholders of
		the Company, if needed);

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		(d) the shareholders of the Target Company have passed
		the resolution approving the transfer of the Target
		Shares; and
		(e) Bluetown Town Zhiyuan has issued its written
		consent on the transfer of the Target Shares.
Completion	:	Completion of the Acquisition shall take place on the day
		all conditions precedent are satisfied (subject to waiver,
		where applicable).
Management of the	:	Significant matters of the Project Company (including but
Target Company		not limited to increase or reduction in capital, amendments
		to the memorandum and articles of association, mergers,
		demergers and liquidation) shall require the approval of
		the shareholders of the Target Company at the general
		meetings and shall require the consent of at least two-
		thirds of the shareholders of the Target Company.
		The board of directors of the Target Company will consist
		of five directors, of which one will be nominated by
		Zhejiang Yinrun, two will be nominated by Greentown
		Town and two will be nominated by Zhejiang Bluetown.
		The chairman of the board of directors shall be the
		director nominated by Greentown Town.
		Two supervisors, of which each of Zhejiang Yinrun and
		Greentown Town shall nominate one, will be responsible
		for supervision of the Target Company according to the
		applicable laws and regulations.
		The general manager shall be responsible for the
		management of the Target Company. Such general
		manager shall be nominated by Zhejiang Bluetown.
Other provisions	:	The Target Company will be allowed to use the
		"Greentown" and "Bluetown" brand names in the Huzhou
		Anji Project.
		Any transfer of interest in the Target Company shall
		be subject to customary rights of first refusal and tag-
		along provisions. Subject to the terms and provisions of
		the Share Transfer and Cooperation Agreement, each JV
		Partner shall not transfer (in whatever form including
		by way of charge) its interest or any part thereof in the
		Project Company to anyone not a JV Partner without the
		prior consent of the other JV Partners.

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INFORMATION ABOUT THE PARTIES AND THE TARGET COMPANY

The Company and Greentown Town

The Company is a company incorporated in the Cayman Islands with limited liability, whose shares are listed on the Main Board of the Stock Exchange. It is one of the leading property developers in the PRC with business operations in various major cities in the PRC and is primarily engaged in developing quality properties targeting mainly middle- and high-income residents in the PRC.

Greentown Town is a company established in the PRC with limited liability and a wholly- owned subsidiary of the Company and is principally engaged in property development.

Counterparties

Zhejiang Yinrun and Ningbo Lanyou are each a company established in the PRC with limited liability, and Ningbo Lanzhen and Bluetown Town Zhiyuan are each a limited partnership established in the PRC. Each of them is principally engaged in property development in the PRC. To the best knowledge of the Directors after making reasonable enquiries:

1. the ultimate beneficial shareholders of Zhejiang Yinrun are Liao Chunrong, Chen Feng, Chen Xia, Zhang Jian, Wang Xinyuan;
2. the ultimate beneficial shareholders of Ningbo Lanyou are Liu Hui, Shen Hongfeng and Chen Kunming;
3. the ultimate beneficial shareholders of Ningbo Lanzhen are Wang Jing, Wu Jin, Cao Lujia, Xiao Yue, Lin Jingjing; and
4. Bluetown Town Zhiyuan is approximately 90% owned by Wuchan Zhongda Group Co. Ltd., a company listed on the Shanghai Stock Exchange and of which the ultimate controlling shareholder is State-owned Assets Supervision and Administration of the People's Government of the Zhejiang Province, the PRC. The ultimate beneficial shareholders of the remaining shares of Bluetown Town Zhiyuan are Chen Hao, Wu Jin, Xiao Yue, Xue Yusheng and the ultimate beneficial shareholders of Zhejiang Bluetown. Zhejiang Bluetown owns less than 0.1% of the shares of Bluetown Town Zhiyuan and Mr Song is indirectly interested in Bluetown Town Zhiyua through Zhejiang Bluetown.

Zhejiang Bluetown is a company established in the PRC with limited liability, and is principally engaged in property development in the PRC. It is a subsidiary of Bluetown, which in turn is a company owned as to over 30% shareholding by Mr Song. To the best knowledge of the Directors after making reasonable enquiries, the other ultimate shareholders of Zhejiang Bluetown are Fu Linjiang, Chen Yangguang, Xu Feng, Mi Jiandong, Hu Xiaohang, Shao Yangyang, Zhang Fan, Wang Jing, Cao Lujia, Wu Jin, Xiao Yue, Lin Jing Jing, who are not connected persons of the Company.

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Target Company

The Target Company is a company established in the PRC with limited liability. It was established in 2017 and is primarily engaged in real estate development, tourism project development and management, property management and education project investment.

As at the date of this announcement, the Target Company is owned by Zhejiang Yinrun, Zhejiang Bluetown, Ningbo Lanyou, Ningbo Lanzhen and Bluetown Town Zhiyuan as to 45%, 35%, 10%, 9% and 1%, respectively. Upon completion of the Acquisition, the Target Company will be owned by Greentown Town, Zhejiang Yinrun, Zhejiang Bluetown, Ningbo Lanyou, Ningbo Lanzhen and Bluetown Town Zhiyuan as to 40%, 5%, 35%, 10%, 9% and 1%, respectively. The Target Company will not become a subsidiary of the Company upon completion of the Acquisition. The table below sets out certain audited financial information of the Target Company for the years ended 31 December 2017 and 31 December 2018:

	For the year ended 31 December
	2017	2018
	(RMB)	(RMB)
	'000	'000
Revenue	-	-
Net loss before taxation	(9,026)	(26,844)
Net loss after taxation	(6,770)	(19,216)

The unaudited net asset value of the Target Company as at 30 June 2019 was approximately RMB54,269,873.

REASONS FOR AND BENEFITS OF THE ACQUISITION

As of the date of this announcement, the Huzhou Anji Project has gained progress by securing 14 construction sites, with a gross site area of 645,493 sqm. The parties to the Share Transfer and Cooperation Agreement intend that the Acquisition will facilitate the Target Company in furthering development of the Huzhou Anji Project. Accordingly, the Board believes that the cooperation among the JV Partners will benefit the Huzhou Anji Project with the JV Partners' respective strengths and synergies and will broaden the asset and earnings base of the Company and further strengthen the Company's position as a premier property developer in the PRC. While pursuant to the Share Transfer and Cooperation Agreement, the financial assistance will not be provided by all the shareholders of the Target Company on a pro-rata basis but will only be provided by Greentown Town, Zhejiang Yinrun and Zhejiang Bluetown, the Board considers that in the event that the Target Company requires additional funding, the financial assistance will provide the Target Company with the funding required for the daily operation and management of the Target Company, and is thus in the interest of the Group as a stakeholder of the Target Company.

The terms of the Share Transfer and Cooperation Agreement were determined by arm's length negotiation among the parties to the agreement with reference, among other things: (i) fair market value of comparable properties similar to the Huzhou Anji Project in the comparable phase of development; and (ii) the capital requirement for the development, the actual and anticipated project costs and the prospect of returns of the Huzhou Anji Project.

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In view of the above, the Board considers that the Share Transfer and Cooperation Agreement is on normal commercial terms, fair and reasonable and in the interests of the Company and its Shareholders as a whole.

Based on the confirmation of each Director, the Company is not aware that any Director has a material interest in the Share Transfer and Cooperation Agreement and the transactions contemplated thereunder.

LISTING RULES IMPLICATIONS

Mr Song, a former executive Director who has resigned within 12 months from the date of the Share Transfer and Cooperation Agreement, is a connected person of the Company under the Listing Rules.

As at the date of this announcement, the Target Company is 35% owned by Zhejiang Bluetown, which is in turn 66.5% owned by Bluetown. Bluetown is a company established in the PRC and is owned by Mr Song as to over 30% shareholding. Therefore, each of Bluetown, Zhejiang Bluetown and the Target Company is an associate of Mr Song under rule 14A.12(1)(c) of the Listing Rules and a connected person of the Company.

As one or more of the applicable percentage ratios (as defined in the Listing Rules) exceed 0.1% and all of them are less than 5%, the entering into the Share Transfer and Cooperation Agreement and the transactions contemplated thereunder will constitute a connected transaction of the Company subject to the reporting and announcement requirements but exempt from independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

DEFINITIONS

Unless the context otherwise requires, capitalised terms used in this announcement shall have the following meanings:

"Acquisition"	the acquisition of the Target Shares by Greentown Town
	in accordance with the terms and conditions of the Share
	Transfer and Cooperation Agreement
"Bluetown"	Bluetown Property Construction Management Group Co.,
	Ltd.* ( 藍 城 房 產 建 設 管 理 集 團 有 限 公 司), a company
	established in the PRC with limited liability and an associate
	of Mr Song and hence a connected person of the Company
"Bluetown Town Zhiyuan"	Bluetown Town Zhiyuan (Hangzhou) Investment Limited
	Partnership* ( 藍 城 小 鎮 致 源（杭 州）投 資 合 夥 企 業（有
	限 合 夥）), a limited partnership established in the PRC and
	not a connected person of the Company
"Board"	the board of Directors

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"Changshuo Street	the land parcel in Changshuo Street, Anji District, Huzhou,
Land Parcel"	Zhejiang with a gross site area of approximately 49.6695 mu
"Company"	Greentown China Holdings Limited (stock code: 03900), a
	company incorporated in the Cayman Islands with limited
	liability, the shares of which are listed on the Main Board of
	the Stock Exchange
"connected person(s)"	has the same meaning ascribed to it under the Listing Rules
"Director(s)"	the director(s) of the Company
"Greentown Town"	Greentown Ideal Town Construction Group Co., Ltd.* ( 綠
	城理 想 小 鎮建設 集團有 限公司), a company established
	in the PRC and a wholly-owned subsidiary of the Company
"Group"	the Company together with its subsidiaries
"Huzhou Anji Project"	Huzhou Anji Angel Town Project* ( 湖 州 市 安 吉 縣 天
	使 小 鎮 項 目), situated in Anji District, Huzhou, Zhejiang
	with a gross site area of approximately 645,493 sqm, which is
	intended to be developed into residential properties, schools
	and commercial properties
"JV Partners"	Greentown Town, Zhejiang Yinrun, Zhejiang Bluetown,
	Ningbo Lanyou, Ningbo Lanzhen and Bluetown Town
	Zhiyuan
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
	Exchange
"Mr Song"	Mr Song Weiping
"Ningbo Lanyou"	Ningbo Meishan Bonded Port Area Lanyou Investment
	Management Co., Ltd.* ( 寧 波 梅 山 保 稅 港 區 藍 右 投 資
	管 理 有 限 公 司), a company established in the PRC with
	limited liability and not a connected person of the Company
"Ningbo Lanzhen"	Ningbo Meishan Bonded Port Area Lanzhen Investment
	Management Limited Partnership* ( 寧 波 梅 山 保 稅 港
	區 藍 鎮 投 資 管 理 合 夥 企 業（有 限 合 夥）), a limited
	partnership established in the PRC and not a connected
	person of the Company
"PRC"	the People's Republic of China
"RMB"	Renminbi, the lawful currency of the PRC

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"Share Transfer and	the Share Transfer and Cooperation Agreement dated 24
Cooperation Agreement"	December 2019 entered into among Greentown Town,
	Zhejiang Yinrun, Zhejiang Bluetown, Ningbo Lanyou,
	Ningbo Lanzhen and Bluetown Town Zhiyuan
"Shareholder(s)"	holder(s) of the share(s) of the Company
"sqm"	square metres
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Target Company"	Zhejiang Yinrun Bluetown Real Estate Development Co.,
	Ltd.* ( 浙 江 銀 潤 藍 城 房 地 產 開 發 有 限 公 司), a
	company established in the PRC with limited liability and an
	associate of Mr Song and hence a connected person of the
	Company
"Target Shares"	40% of the total shares of the Target Company as at the date
	of the Share Transfer and Cooperation Agreement
"Zhejiang Bluetown"	Zhejiang Bluetown Construction Management Co., Ltd.* ( 浙
	江 藍 城 建 設 管 理 有 限 公 司), a company established in
	the PRC with limited liability and an associate of Mr Song
	and hence a connected person of the Company
"Zhejiang Yinrun"	Zhejiang Yinrun Leisure Tourism Development Co., Ltd.*
	( 浙 江 銀 潤 休 閒 旅 遊 開 發 有 限 公 司), a company
	established in the PRC with limited liability and an
	independent third party of the Company
"72.855 mu Land Parcel"	the land parcel in Anji District, Huzhou, Zhejiang with a
	gross site area of approximately 72.855 mu
	By order of the Board
	Greentown China Holdings Limited
	Zhang Yadong
	Chairman
Hangzhou, the PRC
24 December 2019

As at the date of this announcement, the Board comprises Mr ZHANG Yadong, Mr LIU Wensheng, Mr ZHOU Lianying, Mr GUO Jiafeng, Mr GENG Zhongqiang and Mr. LI Jun as executive directors, Mr. Stephen Tin Hoi NG (Mr Andrew On Kiu CHOW as his alternative) as a non-executive director and Mr JIA Shenghua, Mr KE Huanzhang, Mr SZE Tsai Ping, Michael and Mr HUI Wan Fai as independent non-executive directors.

• For identification purpose only

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