SOCAM Development : Discloseable Transaction - Disposal of Business Premises

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.

瑞安建業有限公司*

SOCAM Development Limited

(Incorporated in Bermuda with limited liability)

(Stock Code: 983)

DISCLOSEABLE TRANSACTION

DISPOSAL OF BUSINESS PREMISES

The Board announces that on 12 July 2019, the Vendor, an indirect wholly-owned subsidiary of the Company, entered into the Sale and Purchase Agreement with the Purchaser, pursuant to which the Vendor has agreed to dispose of and the Purchaser has agreed to acquire the Business Premises for the Consideration of RMB45.5 million (equivalent to approximately HK$51.87 million).

As one of the applicable percentage ratios calculated under Rule 14.07 of the Listing Rules in respect of the Disposal is more than 5% but 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 12 July 2019, the Vendor, an indirect wholly-owned subsidiary of the Company, and the Purchaser entered into the Sale and Purchase Agreement in respect of the Disposal.

THE SALE AND PURCHASE AGREEMENT

Date

12 July 2019

Parties

1. Vendor: Chengdu Xianglong Real Estate Co., Ltd., an indirect wholly-owned subsidiary of the Company
2. Purchaser: 伊頓教育諮詢(成都)有限公司 (EtonHouse Education Services (Chengdu) Co., Ltd.*)

1

To the best knowledge, information and belief of the Directors having made all reasonable enquiries, the Purchaser and its ultimate beneficial owners are independent of the Company and its connected persons.

Subject matter

Pursuant to the Sale and Purchase Agreement, the Vendor has agreed to dispose of and the Purchaser has agreed to acquire the Business Premises, with a total gross floor area of approximately 3,600 square metres, at Unit 1, First Floor, Tower 19 and Unit 1, First Floor, Tower 21 in the Chengdu Project.

Consideration

The Consideration is RMB45.5 million (equivalent to approximately HK$51.87 million), which was arrived at after arm's length negotiation between the Vendor and the Purchaser with reference to the market value of the Business Premises.

Payment terms

The Purchaser has paid an initial deposit of RMB1 million (equivalent to approximately HK$1.14 million) in cash before signing of the Sale and Purchase Agreement, which shall be applied as part payment of the Consideration.

Pursuant to the terms of the Sale and Purchase Agreement, the balance of the Consideration shall be settled by the Purchaser to the Vendor in cash by three instalments as below:

1. RMB12.65 million (equivalent to approximately HK$14.42 million) shall be paid by the Purchaser to the Vendor within 10 days after signing of the Sale and Purchase Agreement;
2. RMB20.475 million (equivalent to approximately HK$23.34 million) shall be paid (a) no later than 30 November 2019 if the Title Transfer is completed on or before 30 November 2019; or (b) within 10 days after completion of the Title Transfer if the Title Transfer is completed after 30 November 2019; and
3. the remaining balance of the Consideration, being RMB11.375 million (equivalent to approximately HK$12.97 million), shall be paid within one year after signing of the Sale and Purchase Agreement.

Condition

Pursuant to the Sale and Purchase Agreement, the Purchaser shall, within 90 days from the date of signing of the Sale and Purchase Agreement, enter into a loan agreement with a bank to obtain the Loan Facility for the purpose of financing the balance payments of the Consideration as set out in paragraphs (ii) and (iii) above. The Vendor will arrange for the Title Transfer after it has received from the Purchaser the said loan agreement or other proof of the financial capability of the Purchaser to make the balance payments of the Consideration. If the Purchaser cannot provide the same on or before 30 November 2019, the Vendor shall have the right to terminate the Sale and Purchase Agreement and the Purchaser shall pay 20% of the Consideration to the Vendor as penalty.

2

Handover of the Business Premises

The Business Premises is currently occupied by the Purchaser's affiliate as tenant under a tenancy agreement entered into on 20 August 2014 (as amended by supplemental agreements). Pursuant to the terms of the Sale and Purchase Agreement, the Business Premises will be deemed to be handed over by the Vendor to the Purchaser on "as-is" basis on the date of completion of the Title Transfer.

GUARANTEE

Pursuant to the Guarantee, the Purchaser's Guarantor shall provide a joint and several guarantee to the Vendor for the due and punctual payment by the Purchaser of the Consideration, penalties and all legal costs incurred by the Vendor for enforcing its rights under the Sale and Purchase Agreement. The Guarantee shall be effective upon execution until two years after the due date of the last instalment of the Consideration.

FINANCIAL INFORMATION ON THE BUSINESS PREMISES

Rental incomes from the tenancy of the Business Premises to the Purchaser's affiliate for the two financial years ended 31 December 2017 and 31 December 2018 were approximately RMB1.39 million (equivalent to approximately HK$1.58 million) and approximately RMB1.11 million (equivalent to approximately HK$1.27 million) respectively.

For the financial year ended 31 December 2017, the unaudited net profits generated from the Business Premises (both before and after taxation and extraordinary items) were approximately RMB1.17 million (equivalent to approximately HK$1.33 million).

For the financial year ended 31 December 2018, the unaudited net profits generated from the Business Premises (both before and after taxation and extraordinary items) were approximately RMB0.93 million (equivalent to approximately HK$1.06 million).

The carrying value of the Business Premises as at 31 December 2018 was RMB30 million (equivalent to approximately HK$34.2 million).

REASONS FOR AND BENEFIT OF THE DISPOSAL

The Board considers that the Disposal provides an opportunity for the Group to reasonably realise its investment.

It is expected that the Group will record a gain of approximately RMB6.69 million (equivalent to approximately HK$7.63 million) on the Disposal, being the sum of the Consideration less the carrying amount of the Business Premises as at 31 December 2018, taxes and other expenses in relation to the Disposal. The Company intends to use the net proceeds of approximately RMB38.6 million (equivalent to approximately HK$44.0 million) from the Disposal as general working capital of the Group.

The Board believes that the terms of the Sale and Purchase Agreement are fair and reasonable and in the interests of the Company and its shareholders as a whole.

3

GENERAL INFORMATION

The Group principally engages in property development and investment, and asset management in the PRC, property investment and management in Hong Kong, and construction in Hong Kong and Macau.

The Vendor is an indirect wholly-owned subsidiary of the Company, which principally engages in development of the Chengdu Project.

As far as the Company is aware after having made all reasonable enquiries, the Purchaser is a company organised under the laws of the PRC with limited liability and principally engages in education consultancy service.

LISTING RULES IMPLICATIONS

As one of the applicable percentage ratios calculated under Rule 14.07 of the Listing Rules in respect of the Disposal is more than 5% but 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, unless the context otherwise requires, the following expressions shall have the following meanings:

"Board"

"Business Premises"

"Chengdu Project"

the board of Directors;

the business premises situated at Unit 1, First Floor, Tower 19 and Unit 1, First Floor, Tower 21 in the Chengdu Project;

a property project known as Centropolitan located at Jiefang Road North Section One, Jinniu District, Chengdu, Sichuan Province, the PRC with a net site area of approximately 57,400 square metres, which is a mixed-use development consisting of residential units, SOHO and office, retail space and car parks;

"Company"	SOCAM Development Limited, a company incorporated in
	Bermuda with limited liability, whose shares are listed on the
	main board of the Stock Exchange (stock code: 983);
"connected persons" and	each has the meaning ascribed to it under the Listing Rules;
"subsidiary(ies)"
"Consideration"	the consideration for the Disposal, being RMB45.5 million
	(equivalent to approximately HK$51.87 million);

4

"Director(s)" "Disposal"

"Group"

"Guarantee"

"HK$"

"Hong Kong"

"Listing Rules"

"Loan Facility"

"Macau"

"PRC"

"Purchaser"

"Purchaser's Guarantor"

"RMB"

"Sale and Purchase

Agreement"

the director(s) of the Company;

the disposal of the Business Premises by the Vendor to the Purchaser pursuant to the terms of the Sale and Purchase Agreement;

the Company and its subsidiaries;

the guarantee dated 12 July 2019 entered into among the Vendor, the Purchaser and the Purchaser's Guarantor;

Hong Kong dollars, the lawful currency of Hong Kong;

the Hong Kong Special Administrative Region of the People's Republic of China;

the Rules Governing the Listing of Securities on the Stock Exchange;

a loan facility in a principal amount of RMB31.85 million (equivalent to approximately HK$36.31 million) to be obtained by the Purchaser from a bank;

the Macau Special Administrative Region of the People's Republic of China;

the People's Republic of China (for the purpose of this announcement, excluding Hong Kong, Macau and Taiwan);

伊頓教育諮詢(成都)有限公司 (EtonHouse Education Services (Chengdu) Co., Ltd.*), a company organised under the laws of the PRC with limited liability;

EtonHouse International Holdings Pte. Ltd., a company incorporated in the Republic of Singapore with limited liability, which is the holding company of the Purchaser;

Renminbi, the lawful currency of the PRC;

the Sichuan commodity housing sale and purchase agreement dated 12 July 2019 (as supplemented by a supplemental agreement dated 12 July 2019) entered into between the Vendor and the Purchaser in respect of the Disposal;

5