Huarong Investment Stock : MAJOR TRANSACTION - ENTRUSTED LOAN ARRANGEMENT WITH QINGDAO JIAYAOHUA REAL ESTATE CO., LTD.

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(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2277) MAJOR TRANSACTION ENTRUSTED LOAN ARRANGEMENT WITH QINGDAO JIAYAOHUA REAL ESTATE CO., LTD. ENTRUSTED LOAN ARRANGEMENT

On 24 August 2017 (after trading hours), the Lender, an indirect wholly-owned subsidiary of the Company, entered into the Entrusted Loan Agreement with the Borrower and the Lending Agent pursuant to which the Lender agreed to provide the Entrusted Loan in the principal amount of up to RMB680 million (equivalent to approximately HK$788.8 million) to the Borrower through the Lending Agent.

IMPLICATIONS UNDER THE LISTING RULES

As disclosed in the Previous Announcement, the Purchaser, an indirect wholly-owned subsidiary of the Company, entered into the Sale and Purchase Agreement with the Vendor in relation to the Acquisition of the Convertible Bonds issued by the Issuer. As the Borrower is an indirectly non wholly-owned subsidiary of the Issuer, the Acquisition and the provision of the Entrusted Loan, which are completed within 12 months, are aggregated for the purpose of Chapter 14 of the Listing Rules by virtue of Rule 14.22 of the Listing Rules.

As one or more of the applicable percentage ratios in respect of the transactions contemplated under the Entrusted Loan Agreement, on a standalone basis or on an aggregate basis with the Sale and Purchase Agreement, are more than 25% but less than 100%, the transactions contemplated under the Entrusted Loan Agreement (whether on a standalone basis or on an aggregate basis with the Sale and Purchase Agreement) constitute a major transaction for the Company under Chapter 14 of the Listing Rules which is subject to the reporting, announcement and shareholders' approval requirements pursuant to Chapter 14 of the Listing Rules.

To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, no Shareholder or any of their respective associates have any material interest in the Acquisition and the provision of the Entrusted Loan, thus no Shareholder is required to abstain from voting if the Company was to convene a general meeting for the approval of the provision of the Entrusted Loan. The Company has obtained a written shareholder's approval from Right Select, the controlling Shareholder holding approximately 50.99% of the total issued shares of the Company as at the date of this announcement, in lieu of holding a general meeting to approve the provision of the Entrusted Loan in accordance with Rule

14.44 of the Listing Rules.

GENERAL

Pursuant to Rule 14.41(a) of the Listing Rules, a circular containing, among other matters, further information on the provision of the Entrusted Loan together with a notice convening the general meeting, shall be despatched within 15 business days after publication of this announcement (i.e. on or before 14 September 2017).

INTRODUCTION

Reference is made to the Previous Announcement in relation to the Acquisition of the Convertible Bonds issued by the Issuer.

The Board is pleased to announce that, on 24 August 2017 (after trading hours), the Lender, an indirect wholly-owned subsidiary of the Company, entered into the Entrusted Loan Agreement with the Borrower (an indirect non-wholly owned subsidiary of the Issuer) and the Lending Agent pursuant to which the Lender agreed to provide the Entrusted Loan in the principal amount of up to RMB680 million (equivalent to approximately HK$788.8 million) to the Borrower through the Lending Agent.

ARRANGEMENTS UNDER THE ENTRUSTED LOAN AGREEMENT Date 24 August 2017 (after trading hours)

Parties Lender: 新余華融晟遠投資有限公司 (Xinyu Huarong Shengyuan Investment Co., Ltd.*), an indirect wholly-owned subsidiary of the Company, which is principally engaged in the provision of investment management in the PRC

Borrower: 青島嘉耀華置業有限公司 (Qingdao

Jiayaohua Real Estate Co., Ltd.*), a company based in Qingdao, Shandong Province, the PRC and principally engaged in, among others, hotel management and real estate development and management

Lending Agent: A commercial bank incorporated in

the PRC

Amount of the Entrusted Loan

Not more than RMB680 million (equivalent to approximately HK$788.8 million)

Term Not exceeding three years commencing from the date of first drawdown of the Entrusted Loan Interest rate 7% per annum Conditions precedent The provision of not more than RMB300 million

(equivalent to approximately HK$348 million) of the Entrusted Loan by the Lender to the Borrower is conditional upon, among others, the satisfaction of the following conditions:

1. the Agreements having been duly signed and executed;

2. the Charge and Pledge Documents having been signed and becoming effective; and

3. having obtained all the internal approvals and authorisations from the Company

The provision of the remaining amount under the Entrusted Loan by the Lender to the Borrower is further conditional upon the Lending Agent becoming the sole chargee in relation to the land use rights of the Land

Repayment terms The Borrower shall repay the interests on a quarterly

basis and the principal amount upon expiry of the term of the Entrusted Loan

Purpose of the Entrusted Loan

The Entrusted Loan shall be used for the following purposes:

1. not exceeding RMB400 million (equivalent to approximately HK$464 million) shall be used to repay loans from the shareholder of the Borrower; and

2. the remaining shall be used for the funding of a construction project on the Land

Securities and guarantees

Obligations of the Borrower under the Agreements are secured and guaranteed by the Security Documents

Other commitments of the Borrower

The Borrower has also agreed that during the term of the Entrusted Loan Agreement, among others:

1. the Borrower shall deposit and use the proceeds from sale of commodity properties on the Land in accordance with the Escrow Agreement;

2. the Borrower shall not provide any guarantee or counter guarantee;

3. the Borrower shall not pledge any of its assets other than pursuant to the arrangement of the provision of the Entrusted Loan; and

4. the Lender shall have a right to appoint one director and one supervisor to the board of directors and the board of supervisory board of the Borrower respectively