Oi Wah Pawnshop Credit : DISCLOSEABLE TRANSACTION PROVISION OF FINANCIAL ASSISTANCE

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

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1319)

DISCLOSEABLE TRANSACTION

PROVISION OF FINANCIAL ASSISTANCE

PROVISION OF FINANCIAL ASSISTANCE

The Board is pleased to announce that on 20 December 2019, Loan Agreement B was entered into between Oi Wah PL as lender and Two Customers as borrowers. Pursuant to Loan Agreement B, Oi Wah PL has agreed to grant the Loan to Two Customers for a term of 24 months.

LISTING RULES IMPLICATIONS

As the applicable percentage ratios under Rule 14.07 of the Listing Rules in respect of the Loan granted to Two Customers under Loan Agreement B exceed 5% but are less than 25%, the grant of the Loan constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules.

As Customer B and Customer C are associated with each other, the grant of the Loan and the Existing Loan requires aggregation under Rule 14.22 of the Listing Rules. As the applicable percentage ratios in respect of the Loan and the Existing Loan granted to the Customers under Rule 14.07 of the Listing Rules exceed 5% but are less than 25%, the grant of the Loan and the Existing Loan constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules.

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PROVISION OF THE LOAN

The Board is pleased to announce that on 20 December 2019, Loan Agreement B was entered into between Oi Wah PL as lender and Two Customers as borrowers. Pursuant to Loan Agreement B, Oi Wah PL has agreed to grant the Loan to Two Customers for a term of 24 months.

Summarised below are the principal terms of Loan Agreement B.

Pursuant to Loan Agreement B, the mortgaged property under Loan Agreement B is insured against fire risks with an insurance company approved by Oi Wah PL.

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PROVISION OF THE EXISTING LOAN

Prior to the entering into of Loan Agreement B, Oi Wah CL, as lender, has entered into Loan Agreement A for the grant of an existing secured loan to Customer C. A summary of Loan Agreement A is set out as follows:

Pursuant to Loan Agreement A, the mortgaged property under Loan Agreement A is insured against fire risks with an insurance company approved by Oi Wah CL.

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INFORMATION ON THE CREDIT RISK RELATING TO THE LOANS

The making of the Loan is collaterised. The collateral provided by Two Customers for the Loan is sufficient as the loan-to-value ratio of the mortgaged property for the Loan to the Group is approximately 64% based on the value of the mortgaged property for the Loan as determined by an independent valuer.

The making of the Existing Loan is collaterised. The collateral provided by Customer C for the Existing Loan is sufficient as the loan-to-value ratio of the mortgaged property is approximately 69% (loan-to-value ratio of first mortgage: approximately 37%, loan-to-value ratio of the Existing Loan as a subordinated mortgage to another independent mortgagee: 7%, loan-to-value ratio of the Existing Loan as a subordinated mortgage to the Group: approximately 25%) based on the value of the mortgaged property for the Existing Loan as determined by an independent valuer.

The advances in respect of the Loan and the Existing Loan were also made on the basis of the Company's credit assessments made on (i) the collateral provided by the Customers, which are at the prime sites in Hong Kong; (ii) the fact that the Customers are our repeated customers with no default record; and (iii) the relatively short term nature of the advances. After taking into account the factors as disclosed above in assessing the risks of the relevant advances, the Company considers that the risks involved in the advances to the Customers are relatively low.

FUNDING OF THE LOAN

The Group will finance the Loan with the Company's general working capital.

INFORMATION ON CUSTOMER A

Customer A is a merchant and is the mother of Customer B. Customer A is our repeated customer with no default record. To the best of the knowledge, information and belief of the Directors having made all reasonable enquiry, Customer A is an Independent Third Party and not connected with the Group.

INFORMATION ON CUSTOMER B

Customer B is the daughter of Customer A and is our repeated customer with no default record. To the best of the knowledge, information and belief of the Directors having made all reasonable enquiry, Customer B is an Independent Third Party and not connected with the Group.

INFORMATION ON CUSTOMER C

Customer C is a merchant and our repeated customer with no default record. To the best of the knowledge, information and belief of the Directors having made all reasonable enquiry, Customer C is an Independent Third Party and not connected with the Group.

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INFORMATION ON THE GROUP AND THE LENDERS

The Group is a financing service provider in Hong Kong mainly providing secured financing, including pawn loans and mortgage loans under the provisions of the Pawnbrokers Ordinance and the Money Lenders Ordinance. Oi Wah PL, as the lender of the Loan, is an indirect wholly-owned subsidiary of the Company. Oi Wah CL, as the lender of the Existing Loan, is an indirect wholly- owned subsidiary of the Company.

REASONS FOR ENTERING INTO THE LOAN AGREEMENTS

Taking into account the principal business activities of the Group, the grant of the Loan and the Existing Loan to the Customers is in the ordinary and usual course of business of the Group.

The terms of Loan Agreement A and Loan Agreement B were negotiated on an arm's length basis between Oi Wah PL, Oi Wah CL and the Customers. The Directors consider that the grant of the Loan and the Existing Loan is financial assistance provided by the Company within the meaning of the Listing Rules. The Directors are of the view that the terms of Loan Agreement A and Loan Agreement B were entered into on normal commercial terms based on the Company's credit policy. Taking into account the satisfactory financial background of the Customers and that a stable revenue and cashflow stream from the interest income is expected, the Directors consider that the terms of Loan Agreement A and Loan Agreement B are fair and reasonable and the entering into of Loan Agreement A and Loan Agreement B is in the interests of the Company and its shareholders as a whole.

LISTING RULES IMPLICATIONS

As the applicable percentage ratios under Rule 14.07 of the Listing Rules in respect of the Loan granted to Two Customers under Loan Agreement B exceed 5% but are less than 25%, the grant of the Loan constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules.

As Customer B and Customer C are associated with each other, the grant of the Loan and the Existing Loan requires aggregation under Rule 14.22 of the Listing Rules. As the applicable percentage ratios in respect of the Loan and the Existing Loan granted to the Customers under Rule

14.07 of the Listing Rules exceed 5% but are less than 25%, the grant of the Loan and the Existing Loan constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules.

It is required under Rule 14.58(2) of the Listing Rules to disclose the identities of the Two Customers. Since (i) the Loan is not regarded as a material transaction of the Company as compared to the Company's overall financial position; (ii) the Company has practical difficulties in complying with the aforesaid disclosure requirement as the Two Customers have confirmed to the Group that they will not consent to the disclosure of their identities in this announcement; (iii) the disclosure of the identities of the Two Customers does not reflect their financial standing or repayment abilities

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and thus will serve little purpose in assisting the Shareholders to evaluate their creditworthiness and the risks and exposure of the Loan; and (iv) the Company has made alternative disclosures in respect of the Loan in this announcement, including but not limited to the details of the collateral and the loan-to-value ratio of the collateral in respect of the Loan, which would be much more meaningful for the Shareholders in assessing the risk and exposure of the Loan and the repayment abilities of the Two Customers, the Company has applied to, and been granted by, the Stock Exchange for a waiver from strict compliance with Rule 14.58(2) of the Listing Rules.

DEFINITIONS

In this announcement, the following expressions have the following meanings:

"Independent Third Party(ies)" party(ies) who is/are independent of the Company and its

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As at the date of this announcement, the Board comprises Mr. Chan Kai Ho Edward (Chief Executive Officer and Chairman), Mr. Chan Chart Man, Ms. Chan Mei Fong and Ms. Chan Ying Yu as executive Directors; Mr. Chan Kai Kow Macksion and Mr. Ng Siu Hong as non-executive Directors; and Mr. Lam On Tai, Dr. Leung Shiu Ki Albert and Dr. Yip Ngai as independent non- executive Directors.

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