Asia Standard International : Discloseable Transaction in relation to Disposals of the Kaisa Securities

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this joint 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 joint announcement.

IN RELATION TO

DISPOSALS OF THE KAISA SECURITIES

THE DISPOSALS

On 18 and 22 February 2021, the Kaisa Securities were disposed of on the open market at an aggregate consideration of approximately US$9.8 million (equivalent to approximately HK$76.0 million) by the Seller.

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios in respect of the Disposals, when aggregated with the Previous Disposals, exceeds 5% but is or are less than 25% for ASI, the Disposals constitute a discloseable transaction for ASI, and is therefore subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

As all of the applicable percentage ratios in respect of the Disposals, when aggregated with the Previous Disposals, are below 5% for AO, the Disposals do not constitute a notifiable transaction for AO under Chapter 14 of the Listing Rules.

As all of the applicable percentage ratios in respect of the Disposals, when aggregated with the Previous Disposals and any other previous disposals over the past 12 months of the notes issued by Kaisa by AO Group and ASI Group (on a non-consolidated and standalone basis), would still be classified as a major disposal transaction for each of AO and ASI under Chapter 14 of the Listing Rules, and since each of AO and ASI has complied with the major disposal transaction requirements in respect of the Major Transaction as set out in the 18 December 2020

Announcement and 29 January 2021 Circulars, each of AO and ASI is not required to reclassify the Disposals and the Previous Disposals by aggregating them with any other previous disposals over the past 12 months of the notes issued by Kaisa by AO Group and ASI Group (on a non-consolidated and standalone basis) and the implications of the applicable percentage ratios in respect of the Disposals, when aggregated with the Previous Disposals are determined on a standalone basis.

THE DISPOSALS

On 18 and 22 February 2021, the Kaisa Securities were disposed of on the open market at an aggregate consideration of approximately US$9.8 million (equivalent to approximately HK$76.0 million) by the Seller.

In view that the Disposals were conducted through the open market, AO and ASI are not aware of the identities of the purchasers of the Kaisa Securities. To the best of the knowledge, information and belief of AO Directors and ASI Directors having made all reasonable enquiries, the purchasers of the Kaisa Securities and their respective ultimate beneficial owners are Independent Third Parties of AO and ASI.

INFORMATION ON THE KAISA SECURITIES

The Kaisa Securities are listed and quoted on the SGX-ST.

As at 30 September 2020, the carrying value of the Kaisa Securities held by ASI Group under the Disposals was approximately HK$72.5 million. The net profits (both before and after taxation) attributable to the Kaisa Securities which were disposed of by ASI Group under the Disposals were approximately HK$7.3 million and approximately HK$7.0 million for the financial years ended 31 March 2019 and 2020 respectively.

REASONS FOR AND BENEFITS OF THE DISPOSALS

The Disposals form part of the investing activities of AO Group and ASI Group, which are conducted in their ordinary and usual course of business. As part of their principal business, AO Group and ASI Group monitor the performance of their respective securities portfolios and make adjustments to them (with regard to the types and/or amounts of the securities held) from time to time.

The Disposals will provide AO Group and ASI Group with an opportunity to realise their investments in the Kaisa Securities, and to re-allocate resources for other reinvestment opportunities when they arise.

Having considered the terms of the Disposals (including but not limited to the disposal prices), AO Directors and ASI Directors respectively believe that such terms are fair and reasonable and the Disposals are in the interests of AO, ASI and their respective shareholders as a whole.

FINANCIAL EFFECTS OF THE DISPOSALS AND USE OF PROCEEDS

As a result of the Disposals, it is expected that ASI Group will record a loss before tax and before non-controlling interest of approximately HK$1.0 million in the current financial year. The loss represents the difference between the consideration and the cost of the Kaisa Securities as disposed of by ASI Group under the Disposals, less the incremental interest income from the difference between the yield and the coupon amortised to profit and loss in prior years, plus the written back of expected credit loss and the reversal of unrealised exchange loss recognised in prior years.

ASI Directors intend to apply the proceeds from the Disposals as general working capital and/or for other reinvestment opportunities when they arise.

INFORMATION ON AO, ASI AND THE SELLER

AO is a limited liability company incorporated in Bermuda whose shares are listed on the Main Board. AO Group is principally engaged in property management, development and investment, hotel operations and securities investments.

ASI is a limited liability company incorporated in Bermuda whose shares are listed on the Main Board. ASI Group is principally engaged in investment and development of commercial, retail and residential properties and securities investments. Through ASH, ASI Group is also involved in hotel operations.

The Seller is a company incorporated in the British Virgin Islands with limited liability and an indirect wholly-owned subsidiary of ASI. As at the date hereof, it is principally engaged in securities investment.

INFORMATION ON KAISA

Kaisa is an investment holding company, and its subsidiaries are principally engaged in property development, property investment, property management, hotel and catering operations, cinema, department store and cultural centre operations, water-way passenger and cargo transportation and healthcare business in the PRC. To the best of the knowledge, information and belief of AO Directors and ASI Directors having made all reasonable enquiries (based on the information available to AO and ASI), Kasia and its ultimate beneficial owners are Independent Third Parties of AO and ASI.

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios in respect of the Disposals, when aggregated with the Previous Disposals, exceeds 5% but is or are less than 25% for ASI, the Disposals constitute a discloseable transaction for ASI, and is therefore subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

As all of the applicable percentage ratios in respect of the Disposals, when aggregated with the Previous Disposals, are below 5% for AO, the Disposals do not constitute a notifiable transaction for AO under Chapter 14 of the Listing Rules.

As all of the applicable percentage ratios in respect of the Disposals, when aggregated with the Previous Disposals and any other previous disposals over the past 12 months of the notes issued by Kaisa by AO Group and ASI Group (on a non-consolidated and standalone basis), would still be classified as a major disposal transaction for each of AO and ASI under Chapter 14 of the Listing Rules, and since each of AO and ASI has complied with the major disposal transaction requirements in respect of the Major Transaction as set out in the 18 December 2020 Announcement and 29 January 2021 Circulars, each of AO and ASI is not required to reclassify the Disposals and the Previous Disposals by aggregating them with any other previous disposals over the past 12 months of the notes issued by Kaisa by AO Group and ASI Group (on a non-consolidated and standalone basis) and the implications of the applicable percentage ratios in respect of the Disposals, when aggregated with the Previous Disposals are determined on a standalone basis.

DEFINITIONS

Unless the context otherwise requires, the following terms have the following meanings in this joint announcement:

As at the date of this joint announcement,

• (a) the executive directors of AO are Mr. Fung Siu To, Clement, Mr. Poon Jing, Mr. Poon Hai, Mr. Poon Yeung, Roderick, Mr. Lun Pui Kan and Mr. Kwan Po Lam, Phileas and the independent non-executive directors of AO are Mr. Cheung Kwok Wah, Mr. Leung Wai Keung and Mr. Wong Chi Keung; and

• (b) the executive directors of ASI are Mr. Fung Siu To, Clement, Mr. Poon Jing, Mr. Poon Hai, Mr. Poon Yeung, Roderick, Mr. Lun Pui Kan and Mr. Kwan Po Lam, Phileas and the independent non-executive directors of ASI are Mr. Koon Bok Ming, Alan, Mr. Leung Wai Keung and Mr. Wong Chi Keung.

* For identification purpose only