Joy City Property : DISCLOSEABLE AND CONNECTED TRANSACTION PROVISION OF FINANCIAL ASSISTANCE

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JOY CITY PROPERTY LIMITED

大悅城地產有限公司

(incorporated in Bermuda with limited liability)

(Stock code: 207)

DISCLOSEABLE AND CONNECTED TRANSACTION

PROVISION OF FINANCIAL ASSISTANCE

PROVISION OF FINANCIAL ASSISTANCE

On 24 December 2019, Shanghai Yueyao, an indirect non-wholly-owned subsidiary of the Company, entered into the Loan Agreement with Shanghai Qiantan (a connected person of the Company at subsidiary level), pursuant to which Shanghai Yueyao agreed to provide unsecured revolving loan facilities of an aggregate amount of up to RMB1,100,000,000 to Shanghai Qiantan in accordance with the terms and conditions under the Loan Agreement. Shanghai Yueyao is principally engaged in the development in, and the investment of, commercial and residential properties in Qiantan, Pudong, Shanghai and is owned as to 50% by Shanghai Qiantan, and the Loan is provided by Shanghai Yueyao to Shanghai Qiantan in proportion to its shareholding interest in Shanghai Yueyao.

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios in respect of the Loan Agreement are more than 5% but are all less than 25%, the provision of the Loan pursuant to the Loan Agreement constitutes a discloseable transaction of the Company pursuant to the Listing Rules and is subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

As at the date of this announcement, Shanghai Yueyao is an indirect non-wholly owned subsidiary of the Company. Shanghai Qiantan holds 50% equity interest in Shanghai Yueyao and accordingly is its substantial shareholder. Therefore, Shanghai Qiantan is a connected person at the subsidiary level according to Rule 14A.07(1) of the Listing Rules. Accordingly, the Loan constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. By virtue of Rule 14A.101 of the Listing Rules, since (1) Shanghai Qiantan is a connected person at the subsidiary level, (2) the Board has approved the Loan; and (3) the independent non-executive Directors have confirmed that the terms of the Loan are fair and reasonable and the Loan is on normal commercial terms or better and in the interests of the Company and its shareholders as a whole, the Loan is subject to the reporting and announcement requirements, and is exempt from the circular, independent financial advice and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.

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INTRODUCTION

The Board is pleased to announce that on 24 December 2019, Shanghai Yueyao, an indirect non-wholly- owned subsidiary of the Company, entered into the Loan Agreement with Shanghai Qiantan (a connected person of the Company at the subsidiary level), pursuant to which Shanghai Yueyao agreed to provide unsecured revolving loan facilities of an aggregate amount of up to RMB1,100,000,000 to Shanghai Qiantan in accordance with the terms and conditions under the Loan Agreement. Shanghai Yueyao is principally engaged in the development in and the investment of commercial and residential properties in Qiantan, Pudong, Shanghai and is owned as to 50% by Shanghai Qiantan, and the Loan is provided by Shanghai Yueyao to Shanghai Qiantan in proportion to its shareholding interest in Shanghai Yueyao.

PROVISION OF FINANCIAL ASSISTANCE

The principal terms of the Loan Agreement are set out below:

Provision of unsecured revolving loan facilities

Pursuant to the Loan Agreement, Shanghai Yueyao has agreed to provide unsecured revolving loan facilities in the aggregate amount of not more than RMB1,100,000,000 to Shanghai Qiantan. The loan period of the Loan Agreement is from 27 December 2019 to 26 December 2020 ("Loan Period"). Shanghai Qiantan may draw down and repay in whole or in part the Loan in accordance with the terms and conditions of the Loan Agreement during the Loan Period, provided that the aggregate amount drawn down under the Loan at any time during the Loan Period does not exceed RMB1,100,000,000.

Interest rate and payment

The interest rate for the amounts drawn down for the Loan under the Loan Agreement shall be determined with reference to the prevailing benchmark interest rate for demand deposits in the PRC as promulgated by the People's Bank of China from time to time. The interest payments on the outstanding principal amount shall be payable on a quarterly basis to Shanghai Yueyao.

Repayment date

The repayment date of the principal amount and the outstanding interest shall be on the date falling on the end of the Loan Period. Shanghai Yueyao may demand for an early repayment of the loan facilities pursuant to the Loan Agreement.

REASONS FOR AND BENEFITS OF THE FINANCIAL ASSISTANCE

As at the date of this Announcement, Shanghai Yueyao is held as to 50% by each of Twin Progress, an indirect wholly-owned subsidiary of the Company, and Shanghai Qiantan. The Group has control over the board of directors and the relevant activities of Shanghai Yueyao, and therefore, Shanghai Yueyao is accounted for as a subsidiary of the Group and the financial results, assets and liabilities of Shanghai Yueyao are consolidated into the accounts of the Group.

Shanghai Yueyao is principally engaged in the investment in and development of a commercial and residential properties in Qiantan, Pudong, Shanghai (the "Project"). As at the date of this Announcement, Shanghai Yueyao has not yet met the conditions for distribution of profits of the Project to Twin Progress and Shanghai Qiantan. Shanghai Yueyao agreed to provide a loan to each of Twin Progress and Shanghai Qiantan on a pro rata basis according to their respective shareholding interest in Shanghai Yueyao to replenish the working capital of its shareholders on a short-term basis.

The Directors believe that it is in the interest of the Company to receive profits generated from the Project at an earlier time by way of loans from Shanghai Yueyao to replenish the working capital of the Group. In

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addition, interest income will be generated from the Loan based on the outstanding principal amounts of the Loan, which will contribute to the income of the Group. Further, the terms of the Loan Agreement were negotiated on an arm's length basis between the relevant parties based on, among other things, the financing needs requested by Shanghai Qiantan and Shanghai Yueyao's assessment on the source of funds for repayment and the business conditions and creditworthiness of Shanghai Qiantan.

Based on the above, the Directors (including the independent non-executive Directors) consider the terms of the Loan Agreement are entered into on normal commercial terms or better, and the transactions contemplated thereunder are fair and reasonable and in the interests of the Company and its shareholders as a whole.

INFORMATION ON THE PARTIES

The Company

The Company is an investment holding company incorporated in Bermuda. The Group is principally engaged in development, operation, sales, leasing and management of mixed-use complexes and commercial properties in the PRC. The Group develops, holds and operates various property projects in the PRC.

Shanghai Yueyao

Shanghai Yueyao is a company incorporated in the PRC with limited liability and an indirect non-wholly- owned subsidiary of the Company. It is held as to 50% by each of Twin Progress and Shanghai Qiantan and it is principally engaged in real estate development, property investment and development and the investment and the development of the Project.

Shanghai Qiantan

Shanghai Qiantan is a state-owned company incorporated in the PRC and is a substantial shareholder of Shanghai Yueyao. It is primarily engaged in industrial investment, domestic trade, investment consultation (except for brokerage services), storage (except for hazardous materials), exhibition and conference services, construction of municipal utilities, construction of ground and infrastructure, real estate development and operation.

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios in respect of the Loan Agreement are more than 5% but are all less than 25%, the provision of the Loan pursuant to the Loan Agreement constitutes a discloseable transaction of the Company pursuant to the Listing Rules and is subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

As at the date of this announcement, Shanghai Yueyao is an indirect non-wholly owned subsidiary of the Company. Shanghai Qiantan holds 50% equity interest in Shanghai Yueyao and accordingly is its substantial shareholder. Therefore, Shanghai Qiantan is a connected person at the subsidiary level according to Rule 14A.07(1) of the Listing Rules. Accordingly, the Loan constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. By virtue of Rule 14A.101 of the Listing Rules, since (1) Shanghai Qiantan is a connected person at the subsidiary level, (2) the Board has approved the Loan; and (3) the independent non-executive Directors have confirmed that the terms of the Loan are fair and reasonable and the Loan is on normal commercial terms or better and in the interests of the Company and its shareholders as a whole, the Loan is subject to the reporting and announcement requirements, and is exempt from the circular, independent financial advice and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.

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To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, none of the Directors was in any way materially interested in the Loan Agreement and the transactions contemplated thereunder.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms have the following meanings:

In this announcement, unless the context requires otherwise, the terms "connected person", "percentage ratio(s)", "subsidiary(ies)" and "substantial shareholder(s)" shall have the meanings given to such terms in the Listing Rules.

By order of the Board

Joy City Property Limited

Zhou Zheng

Chairman

The PRC, 24 December 2019

As at the date of this announcement, the Board comprises Mr. ZHOU Zheng (Chairman) and Mr. CAO Ronggen as executive Directors; Mr. JIANG Yong as non-executive Director; and Mr. LAU Hon Chuen, Ambrose, GBS, JP, Mr. LAM Kin Ming, Lawrence and Mr. WU Kwok Cheung, MH as independent non-executive Directors.

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