Best Pacific International : (1)Discloseable Transaction in relation to Formation of Joint Venture and (2)Continuing Connected Transaction in relation to Framework Agreement

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超盈國際控股有限公司

(Incorporated in the Cayman Islands with limited liability)

1. DISCLOSEABLE TRANSACTION IN RELATION TO FORMATION OF JOINT VENTURE AND
2. CONTINUING CONNECTED TRANSACTION IN RELATION TO THE FRAMEWORK AGREEMENT FORMATION OF JOINT VENTURE

   The Board is pleased to announce that on 6 November 2017 (after trading hours), BPSL (Pannala), an indirect wholly-owned subsidiary of the Company, the JV Partner and the JV Company entered into the Shareholders' Agreement in relation to the establishment of the JV Company for the purpose of, amongst other things, regulating the ownership, funding and management in the JV Company. Prior to the execution of the Shareholders' Agreement, the JV Company is owned as to 100% by the JV Partner. Upon completion of the Initial Subscription, the JV Company will be held as to 75% by BPSL (Pannala) and as to 25% by the JV Partner.

   ACQUISITION OF ASSETS Transfer of the ownership of the Detachable Structures

   As part of the contribution of the JV Partner to the Total Capital of the JV Company, the JV Partner will procure BTL to transfer the ownership of the Detachable Structures having a total value of US$1,500,000 (equivalent to approximately HK$11,700,000) to the JV Company pursuant to the terms of the Shareholders' Agreement.

   Transfer of the ownership of the Equipment

   Pursuant to the Shareholders' Agreement, the Parties agreed that, the JV Partner shall procure the sale of the Equipment by BTL to the JV Company for a consideration of US$94,001 (equivalent to approximately HK$733,207.8).

   Lease of the Freehold Land

   Simultaneous with the execution of the Shareholders' Agreement, BTL and the JV Company entered into the Lease Agreement, pursuant to which, BTL will lease the Freehold Land to the JV Company for a term of 99 years at a total consideration of US$2,200,000 (equivalent to approximately HK$17,160,000) which shall be paid in one lump sum, in accordance with the terms of the Lease Agreement. The JV Company shall have the option to renew the Lease Agreement after the expiration of the term of the Lease Agreement for a further term of 99 years on the same terms and conditions at a consideration of US$1 by giving six months' prior notice in writing to BTL.

   Assignment of leasehold rights to the Leasehold Land

   Pursuant to the Shareholders' Agreement, subject to approval from the relevant governmental authorities in Sri Lanka on the execution of the Deed of Assignment, BTL and the JV Company shall enter into the Deed of Assignment, pursuant to which, BTL shall assign its leasehold rights to the Leasehold Land to the JV Company at a consideration of US$300,000 (equivalent to approximately HK$2,340,000) which shall be paid by the JV Company to BTL within ten business days from the date of the Deed of Assignment in accordance with the terms of the Deed of Assignment.

   THE FRAMEWORK AGREEMENT

   Upon completion of the Initial Subscription, the JV Company will be held as to 75% by BPSL (Pannala) and as to 25% by the JV Partner and the JV Partner is therefore a connected person of the Company at the subsidiary level under Rule 14A.06(9) of the Listing Rules; and as a result, the JV Partner and its associates will then become connected persons of the Company.

   The BPTHL Group currently sells, and will continue to sell, the Products to the Brandix Group. Such transactions between the BPTHL Group and the Brandix Group will, upon completion of the Initial Subscription, become continuing connected transactions for the Company under Chapter 14A of the Listing Rules. Against this background, simultaneous with the execution of the Shareholders' Agreement, BPTHL and the JV Partner entered into the Framework Agreement for a term of three years commencing on the Effective Date in respect of such transactions. BPTHL and the JV Partner may mutually agree in writing to renew the Framework Agreement for a further term of three years no less than three months prior to the expiration of the Framework Agreement, subject to compliance with the then applicable requirements of the Listing Rules and subject to the same terms and conditions as stated in the Framework Agreement provided that the Annual Caps mentioned in the Framework Agreement may be adjusted at the request of BPTHL and mutual agreement between BPTHL and the JV Partner.

   LISTING RULES IMPLICATIONS Shareholders' Agreement

   As one or more of the applicable percentage ratios (as defined in the Listing Rules) in respect of the formation of the JV Company contemplated under the Shareholders' Agreement exceeds 5% and all of the percentage ratios are less than 25%, the entering of the Shareholders' Agreement constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules and is subject to the notification and announcement requirements under Chapter 14 of the Listing Rules.

   Acquisition of Assets

   The Acquisition of Assets by the JV Company will constitute an acquisition of Assets by the Company under the Listing Rules. As all of the applicable percentage ratios (as defined in the Listing Rules) for the Acquisition of Assets, in aggregate, are less than 5%, the Acquisition of Assets, in aggregate, does not constitute a notifiable transaction for the Company under Chapter 14 of the Listing Rules.

   The Deed of Assignment, when executed, and the transactions contemplated thereunder will constitute a connected transaction of the Company unless the insignificant subsidiary exemption under Rule 14A.09 of the Listing Rules applies. Further announcement will be made by the Company in accordance with the Listing Rules as and when appropriate.

   Framework Agreement

   Upon completion of the Initial Subscription, the JV Company will be held as to 75% by BPSL (Pannala) and as to 25% by the JV Partner and the JV Partner is therefore a connected person of the Company at the subsidiary level under Rule 14A.06(9) of the Listing Rules and the transactions contemplated under the Framework Agreement constitute continuing connected transactions of the Company.

   As (i) the Board has approved the Framework Agreement; and (ii) the independent non-executive Directors have confirmed that the terms of the Framework Agreement are fair and reasonable, on normal commercial terms and in the interests of the Company and the Shareholders as a whole, the Framework Agreement is subject to the reporting, announcement and annual review requirements, but is exempted from the circular, independent financial advice and shareholders' approval requirements pursuant to Rule 14A.101 of the Listing Rules.

   FORMATION OF JOINT VENTURE

   The Board is pleased to announce that on 6 November 2017 (after trading hours), BPSL (Pannala), an indirect wholly-owned subsidiary of the Company, the JV Partner and the JV Company entered into the Shareholders' Agreement in relation to the establishment of the JV Company for the purpose of, amongst other things, regulating the ownership, funding and management in the JV Company. Prior to the execution of the Shareholders' Agreement, the JV Company is owned as to 100% by the JV Partner. Upon completion of the Initial Subscription, the JV Company will be held as to 75% by BPSL (Pannala) and as to 25% by the JV Partner.

   The principal terms of the Shareholders' Agreement are set out below:

   THE SHAREHOLDERS' AGREEMENT

   Date: 6 November 2017

   Parties: (1) BPSL (Pannala)

3. JV Partner

4. JV Company

To the best of the Directors' knowledge, information and belief and after making reasonable enquiries, as at the date hereof, the JV Partner, the JV Company and their respective ultimate beneficial owners are third parties independent of the Company and its connected persons (as defined under the Listing Rules).

Subject Matter

The JV Company was incorporated under the laws of Sri Lanka with limited liability and, as at the date of this announcement, is owned as to 100% by the JV Partner. Pursuant to the Shareholders' Agreement, BPSL (Pannala) shall subscribe for shares in the JV Company, such that upon completion of the Initial Subscription, the JV Company will be held as to 75% by BPSL (Pannala) and as to 25% by the JV Partner.

Business of the JV Company

The JV Company will be engaged in the manufacturing and the sales of synthetic textiles and textile related products.

Capital Contribution

The capital commitment to be made by BPSL (Pannala) and the JV Partner to the JV Company shall be in proportion to their respective shareholdings in the JV Company. The total investment of the JV Company is estimated to be approximately US$70,000,000 (equivalent to approximately HK$546,000,000) (the "Total Investment"), of which BPSL (Pannala) and the JV Partner shall contribute an aggregate amount of US$50,000,000 (equivalent to approximately HK$390,000,000) (the "Total Capital") as capital or loan pursuant to the terms of the Shareholders' Agreement. The contribution of the Total Capital by both shareholders shall be in cash and/or assets. The Parties agreed that the Total Capital shall be contributed by BPSL (Pannala) and the JV Partner in stages and in proportion to their respective shareholding percentages, provided always that BPSL (Pannala) and the JV Partner shall own 75% and 25% respectively of the total issued share capital of the JV Company upon completion of each contribution to the capital of the JV Company.

Funding required by the JV Group to finance the business of the JV Group amounting to the difference in amount between the Total Investment and the Total Capital and any funding required to meet the operations of the JV Group, other than the Total Capital, shall be provided by either (i) loan(s) taken out by the JV Group from banks and/or financial institutions; or (ii) shareholders' loans by BPSL (Pannala) and the JV Partner, in accordance with the terms of the Shareholders' Agreement and in accordance with their respective shareholding percentages in the JV Company.

The Group intends to finance its investment in the JV Company from bank loans and its internal resources.

The amount of capital contribution to the JV Company was determined after arm's length negotiations between BPSL (Pannala) and the JV Partner with reference to the estimated development and investment costs required for the business of the JV Company.