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首 長 國 際 企 業 有 限 公 司 SHOUGANG CONCORD INTERNATIONAL ENTERPRISES COMPANY LIMITED (Incorporated in Hong Kong with limited liability) (Stock Code: 697)

DISCLOSEABLE AND CONNECTED TRANSACTION ACQUISITION AND CAPITAL INJECTION

On 29 March 2019, the Purchaser, a wholly-owned subsidiary of the Company, Shougang Fund and the Target Company entered into the Agreement in respect of the Acquisition and the Capital Injection.

Subject to the fulfilment or wavier of the conditions precedent set out in the Agreement, (i) Shougang Fund shall sell and the Purchaser shall acquire 75% equity interest in the Target Company, representing RMB37,500,000 in the registered capital of the Target Company, at the consideration of RMB67,394,325; and (ii) the Purchaser shall contribute RMB89,859,100 to the capital of the Target Company, of which RMB50,000,000 will be contributed to the registered capital of the Target Company and the remainder to its capital reserve.

As one of the applicable percentage ratios under Chapter 14 of the Listing Rules is more than 5% but all are less than 25%, the Acquisition and the Capital Injection in aggregate constitute a disclosable transaction for the Company and are subject to the announcement and reporting requirements under Chapter 14 of the Listing Rules.

Shougang Fund is a substantial shareholder of the Company and hence a connected person of the Company. As the percentage ratios (other than the profit ratio) are more than 0.1% but all are less than 5%, the Acquisition and the Capital Injection in aggregate constitute a connected transaction of the Company and are subject to the announcement and reporting requirements but are exempt from independent Shareholders’ approval requirement under Chapter 14A of the Listing Rules.

THE AGREEMENT

On 29 March 2019, the Purchaser, a wholly-owned subsidiary of the Company, Shougang Fund and the Target Company entered into the Agreement in respect of the Acquisition and the Capital Injection. The principal terms of the Agreement are set out below.

Date:

29 March 2019

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Parties

(1) The Purchaser, as transferee and investor;

(2) Shougang Fund, as transferor; and

(3) The Target Company.

The Acquisition

Subject to the fulfilment or wavier of the conditions precedent set out in the Agreement, Shougang Fund shall sell and the Purchaser shall acquire 75% equity interest in the Target Company, representing RMB37,500,000 in the registered capital of the Target Company, at the consideration of RMB67,394,325 in cash.

The Capital Injection

Subject to the fulfilment or wavier of the conditions precedent set out in the Agreement, the Purchaser shall contribute RMB89,859,100 to the capital of the Target Company, of which RMB50,000,000 will be contributed to the registered capital of the Target Company and the remainder to its capital reserve.

The consideration of the Acquisition and the Capital Injection was determined after arm’s length negotiation between the parties with reference to (i) the net asset value and net profit (before and after tax) of the Target Company as at 31 December 2018; (ii) the past operation results of the Target Company and its future development potential, including the investment return of funds managed by the Target Company; and (iii) the synergy between the principal businesses of the Target Company and the Group.

Conditions precedent

The completion of the Acquisition and the Capital Injection shall be conditional upon and subject to:

(1) the Agreement and other legal documents necessary for the Acquisition and