DISCLOSEABLE TRANSACTION:ACQUISITION OF EQUITY INTEREST IN THE TARGET COMPANY

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IPE GROUP LIMITED

國際精密集團有限公司*

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 929)

DISCLOSEABLE TRANSACTION

ACQUISITION OF EQUITY INTEREST

IN THE TARGET COMPANY

The Board is pleased to announce that the Purchaser, an indirect wholly-owned subsidiary of the Company, entered into the First Equity Transfer Agreement, the Second Equity Transfer Agreement and the Third Equity Transfer Agreement with the Vendors on 6 May 2021, pursuant to which the Purchaser agreed to purchase from the Vendors an aggregate of 95.7619% equity interest in the Target Company at the aggregate consideration of RMB78,970,717.

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios (as defined under the Listing Rules) in respect of the First Equity Transfer Agreement, the Second Equity Transfer Agreement and the Third Equity Transfer Agreement, when aggregated, exceeded 5% but was less than 25%, the entering into of the First Equity Transfer Agreement, the Second Equity Transfer Agreement and the Third Equity Transfer Agreement constituted a disclosable transaction of the Company and is therefore subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

• For identification purpose only

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The Board is pleased to announce that the Purchaser, an indirect wholly-owned subsidiary of the Company, entered into the First Equity Transfer Agreement, the Second Equity Transfer Agreement and the Third Equity Transfer Agreement with the Vendors on 6 May 2021, pursuant to which the Purchaser agreed to purchase from the Vendors an aggregate of 95.7619% equity interest in the Target Company at the aggregate consideration of RMB78,970,717.

Upon the completion of the acquisitions under the First Equity Transfer Agreement, the Second Equity Transfer Agreement and the Third Equity Transfer Agreement, the Purchaser will hold an aggregate of 95.7619% equity interest of the Target Company. The Target Company will become an indirect non wholly-owned subsidiary of the Company and the financial information of the Target Company will be consolidated into the accounts of the Group.

THE FIRST EQUITY TRANSFER AGREEMENT

Under the terms of the First Equity Transfer Agreement, the Purchaser agreed to acquire from Mr. Shang and Mr. Zhao an aggregate of 29.2683% equity interest in the Target Company at an aggregate consideration of RMB13,170,717.

The principal terms of the First Equity Transfer Agreement are as follows:

Date

6 May 2021

Parties

1. the Purchaser;
2. Mr. Shang; and
3. Mr. Zhao.

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Acquisition of equity interests of the Target Company

Under the terms of the First Equity Transfer Agreement, the Purchaser agreed to acquire equity interest of the Target Company from Mr. Shang and Mr. Zhao as follows:

1. the Purchaser agreed to acquire 25.0301% equity interest of the Target Company from Mr. Shang at the consideration of RMB11,263,537; and
2. the Purchaser agreed to acquire 4.2382% equity interest of the Target Company from Mr. Zhao at the consideration of RMB1,907,180.

Consideration

The consideration shall be payable by the Purchaser to Mr. Shang and Mr. Zhao in the following manner:

The first tranche payment

1. the Purchaser shall pay RMB1,001,192 and RMB169,525 to Mr. Shang and Mr. Zhao respectively within five business days after the fulfilment of, among others, the following conditions:
2. 1. the shareholders of the Target Company passing a shareholders' resolution approving the First Equity Transfer Agreement and confirming the waiver of the pre-emptive rights of the other shareholders in relation to the equity interest;
   2. the Purchaser having completed the due diligence over the Target Company and the results of which being satisfactory to the Purchaser;
   3. the information provided by Mr. Shang, Mr. Zhao and the Target Company to the Purchaser is true, accurate and complete;
   4. there is no outstanding litigations, arbitrations, judgments or orders which have been initiated against Mr. Shang, Mr. Zhao and the Target Company, and which have a material adverse impact on the transactions contemplated under the First Equity Transfer Agreement; and
   5. there is no event which have a material adverse impact on the financial conditions, operating results, assets and business of the Target Company.

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The second tranche payment

1. Mr. Shang and Mr. Zhao shall settle their shareholders' loan due to the Target Company in the amount of RMB1,001,192 and RMB169,525 respectively (the "Shareholders' Loans") within three business days after receipt of the first tranche payment.
   Within three business days after the settlement of the aforesaid Shareholders' Loans by Mr. Shang and Mr. Zhao, the Purchaser shall pay the remaining consideration, being RMB10,262,345 and RMB1,737,655, to Mr. Shang and Mr. Zhao respectively.
   In the event that Mr. Shang and Mr. Zhao fail to settle the Shareholders' Loans within three business days after receipt of the first tranche payment, Mr. Shang and Mr. Zhao shall return the first tranche payment and pay a compensation amount of RMB350,000 to the Purchaser.

The basis of the consideration was determined after arm's length negotiations among the Purchaser, Mr. Shang and Mr. Zhao mainly taking into consideration of the original acquisition cost of the equity interest in the Target Company by Mr. Shang and Mr. Zhao, being RMB11,263,537 and RMB1,907,180, respectively.

Completion

Mr. Shang and Mr. Zhao shall complete the relevant registration procedures in relation to the transfer of the equity interest to the Purchaser (or other entities as designated by the Purchaser) with the relevant industry and commerce bureau in the PRC within five business days after the date of payment of the second tranche payment by the Purchaser. If Mr. Shang and Mr. Zhao fail to complete the aforesaid registration procedures for over 15 days after the expiry of the aforesaid time, the Purchaser shall be entitled to terminate the First Equity Transfer Agreement, and Mr. Shang and Mr. Zhao shall return the aforesaid first tranche payment and the second tranche payment and pay a compensation amount of RMB12,000,000 to the Purchaser within three days after the termination of the First Equity Transfer Agreement.

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THE SECOND EQUITY TRANSFER AGREEMENT

Under the terms of the Second Equity Transfer Agreement, the Purchaser agreed to acquire from Mr. Tan and Mr. Huang an aggregate of 29.4507% equity interest in the Target Company at an aggregate consideration of RMB25,800,000.

The principal terms of the Second Equity Transfer Agreement are as follows:

Date

6 May 2021

Parties

1. the Purchaser;
2. Mr. Tan; and
3. Mr. Huang.

Acquisition of equity interests of the Target Company

Under the terms of the Second Equity Transfer Agreement, the Purchaser agreed to acquire equity interest of the Target Company from Mr. Tan and Mr. Huang as follows:

1. the Purchaser agreed to acquire 24.8842% equity interest of the Target Company from Mr. Tan at the consideration of RMB21,799,555; and
2. the Purchaser agreed to acquire 4.5665% equity interest of the Target Company from Mr. Huang at the consideration of RMB4,000,445.

Consideration

The consideration shall be payable by the Purchaser to Mr. Tan and Mr. Huang in the following manner:

The first tranche payment

1. the Purchaser shall pay RMB10,899,777 and RMB2,000,223 to Mr. Tan and Mr. Huang respectively within five business days after the fulfilment of the conditions similar to that for the First Equity Transfer Agreement.

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