Man Sang International Limited

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser. If you have sold or transferred all your shares in Man Sang International Limited, you should at once hand this circular to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee. Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular. MAN SANG INTERNATIONAL LIMITED (Incorporated in Bermuda with limited liability) (Stock Code: 938) VERY SUBSTANTIAL ACQUISITION IN RELATION TO THE ACQUISITION OF THE ENTIRE EQUITY INTEREST IN THE TARGET AND THE SALE LOAN AND NOTICE OF SPECIAL GENERAL MEETING A notice convening the special general meeting of Man Sang International Limited (the ‘‘Company’’)to be held at Lotus Room, 6/F, Marco Polo Hongkong Hotel, Harbour City, Tsimshatsui, Kowloon, Hong Kong on Friday, 15 July 2016 at 4:00 p.m. is set out on pages SGM-1 to SGM-2 of this circular. Whether or not you are able to attend, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the office of the Company’s branch share registrar in Hong Kong, Tricor Secretaries Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible but in any event not less than 48 hours before the time of the meeting. Completion and return of the proxy form will not preclude you from attending and voting at the meeting or any adjournment thereof (as the case may be) should you so wish. 16 June 2016 CONTENTS Page Definitions ...................................................................... 1 Letter from the Board ........................................................... 4 Appendix I — Financial information of the Group ........................... I-1 Appendix II — Accountant’s report of the Target Group ...................... II-1 Appendix III — Management discussion and analysis of the Target Group ..... III-1 Appendix IV — Unaudited pro forma financial information of the Enlarged Group ............................................ IV-1 Appendix V — Valuation report of the Property .............................. V-1 Appendix VI — General information .......................................... VI-1 Notice of SGM .................................................................. SGM-1 – i – DEFINITIONS In this circular, unless the context otherwise requires, the following expressions shall have the following meanings: ‘‘Acquisition’’ the acquisition of the Sale Shares and the Sale Loan by the Company from the Vendor pursuant to the terms and conditions of the Agreement ‘‘Agreement’’ the sale and purchase agreement dated 8 April 2016 entered into among the Company, the Vendor and the Guarantor in relation to the Acquisition (as varied by the Deed of Variation) ‘‘associate(s)’’ has the meaning ascribed thereto under the Listing Rules ‘‘Board’’ the board of Directors ‘‘Business Day’’ a day on which banks are open for business in Hong Kong (other than a Saturday, Sunday or a public holiday or a day on which a tropical cyclone warning No. 8 or above or a ‘‘black rainstorm warning signal’’ is hoisted or remains hoisted in Hong Kong at any time between 9:00 a.m. and 5:00 p.m.) ‘‘BVI’’ the British Virgin Islands ‘‘Company’’ Man Sang International Limited, a company incorporated in Bermuda with limited liability, the shares of which are listed and traded on the Main Board of the Stock Exchange (stock code: 938) ‘‘Completion’’ completion of the Acquisition pursuant to the terms and conditions under the Agreement ‘‘Completion Date’’ the date on which Completion occurs ‘‘connected person(s)’’ has the meaning ascribed thereto under the Listing Rules ‘‘Consideration’’ the aggregate consideration payable in respect of all of the Sale Shares and the Sale Loan ‘‘Deed of Variation’’ the deed of variation dated 19 May 2016 entered into betweenthepartiestotheAgreementtovarythepayment terms of the Consideration ‘‘Director(s)’’ the director(s) of the Company ‘‘Enlarged Group’’ the Group after Completion ‘‘Group’’ the Company and its subsidiaries – 1 – DEFINITIONS ‘‘Guaranteed Obligation(s)’’ the agreements, undertakings, liability and obligations of the Vendor pursuant to the Agreement ‘‘Guarantor’’ Ms.WangMing(王茗), an Independent Third Party ‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong ‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC ‘‘Independent Third party(ies)’’ independent third party(ies) who is(are) not connected with the Company and its connected persons (as defined in the Listing Rules) ‘‘Kingstone’’ Chongqing Kingstone Land Co., Ltd (重慶皇石置地有限公司), a company established in the PRC with limited liability and is a wholly-owned subsidiary of New Bright ‘‘Latest Practicable Date’’ 10 June 2016, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein ‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange ‘‘Loan’’ banking facilities in the aggregate principal amount of RMB800 million granted to Kingstone by an independent company, pursuant to a loan agreement dated 23 June 2015 ‘‘Long Stop Date’’ 30 September 2016 (or such other date as may be agreed by the Vendor and the Company in writing) ‘‘New Bright’’ New Bright Investment (Group) Limited (新輝投資(集團)有限公司), a company incorporated in Hong Kong with limited liability and is a wholly-owned subsidiary of the Target ‘‘PRC’’ the People’s Republic of China but excluding, for the purposes of this circular, Hong Kong, Macau Special Administrative Region of the PRC and Taiwan ‘‘Promissory Note’’ the three-year promissory note in the principal amount of HK$1,168 million with interest rate of 8% per annum to be issued by the Company to the Vendor in satisfaction of part of the Consideration ‘‘Property’’ the land and the building erected thereon situated at No. 77 Qingnian Road, Yuzhong District, Chongqing, the PRC – 2 – DEFINITIONS ‘‘Redevelopment’’ or the redevelopment of the Property into a commercial/ ‘‘Redevelopment Project’’ residential complex which will be held for sale and/or leasing purposes ‘‘RMB’’ Renminbi, the lawful currency of the PRC ‘‘Sale Loan’’ all amounts due and owing from the Target to the Vendor immediately before Completion and which as at 31 December 2015 amounted to approximately HK$460 million ‘‘Sale Shares’’ the entire issued share capital of the Target at Completion ‘‘SFO’’ the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) ‘‘SGM’’ the special general meeting of the Company to be convened for, among others, considering and if thought fit, approving the Agreement (including the terms of the Promissory Note) and the transactions contemplated thereunder ‘‘Share(s)’’ the ordinary share(s) in the share capital of the Company ‘‘Shareholder(s)’’ holder(s) of the Share(s) ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited ‘‘Target’’ Gloryear Investments Limited (譽年投資有限公司), a company incorporated in BVI with limited liability ‘‘Target Group’’ the Target and its subsidiaries as set out in the section headed ‘‘Information on the Target Group’’ of this circular ‘‘UBS Collar Derivative’’ the financial product as set out in the confirmation letter dated2July2015signedbyUBSAG,LondonBranchand New Bright and the amendment agreement signed by the same parties ‘‘US$’’ the United States dollars, the lawful currency of the United States ‘‘Vendor’’ Xinli Holdings Limited (鑫力控股有限公司), a company incorporated in BVI with limited liability and wholly-owned by the Guarantor ‘‘%’’ per cent. In this circular, unless otherwise stated, certain amounts dominated in RMB have been translated into HK$ at an exchange rate of RMB1.0 to HK$1.2 for illustrative purpose. – 3 – LETTER FROM THE BOARD MAN SANG INTERNATIONAL LIMITED (Incorporated in Bermuda with limited liability) (Stock Code: 938) Executive Directors: Registered Office: Mr. Lei Hong Wai (Chairman) Clarendon House Ms. Cheng Ka Man, Carman 2 Church Street Mr. Cheung Kwok Wai, Elton Hamilton HM11 Mr. Leung Alex Bermuda Independent Non-executive Directors: Principal Place of Business: Mr. Chan Cheong Tat Suite 2201, 22/F., Sun Life Tower Mr. Kiu Wai Ming The Gateway, 15 Canton Road Mr. Lau Chi Wah, Alex Tsimshatsui Kowloon Hong Kong 16 June 2016 To the Shareholders Dear Sir or Madam, VERY SUBSTANTIAL ACQUISITION IN RELATION TO THE ACQUISITION OF THE ENTIRE EQUITY INTEREST IN THE TARGET AND THE SALE LOAN We refer to the announcements of the Company dated 12 April 2016 and 19 May 2016 in relation to, among other things, the Acquisition. INTRODUCTION On 8 April 2016, the Company, the Vendor and the Guarantor entered into the Agreement, pursuant to which the Company has conditionally agreed to acquire and the Vendor has conditionally agreed to sell the Sale Shares and the Sale Loan at the aggregate Consideration of HK$1,468 million, which will be satisfied by a combination of cash and the issue of the Promissory Note by the Company. On 19 May 2016, the parties to the Agreement entered into the Deed of Variation to vary the payment terms of the Consideration. Initially, the Consideration was to be settled as to HK$500 million in cash and HK$968 million by way of a promissory note to be issued by the – 4 – LETTER FROM THE BOARD Group. Following the entering into of the Deed of Variation, the Consideration is to be settled as to HK$300 million in cash and as to HK$1,168 million by way of the issue of the Promissory Note by the Company. The purpose of this circular is to provide you with, among other things, further information in relation to the Acquisition and a notice of the SGM.

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