China Wan Tong Yuan : MAJOR AND CONNECTED TRANSACTION - PROVISION OF LOAN

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CHINA WAN TONG YUAN (HOLDINGS) LIMITED

中 國 萬 桐 園（ 控 股 ）有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 6966)

MAJOR AND CONNECTED TRANSACTION

PROVISION OF LOAN

THE LOAN AGREEMENT

On 7 May 2021, the Company entered into the Loan Agreement with China VAST, pursuant to which the Company has conditionally agreed to provide the Loan in the principal amount of RMB100,000,000 (or its equivalent in Hong Kong dollars) to China VAST for a term of one year at an interest rate of 12% per annum.

LISTING RULES IMPLICATIONS

As the Loan constitutes an advance to an entity which exceeds 8% under the asset ratio defined under Rule 14.07(1) of the Listing Rules, pursuant to Rule 13.13 of the Listing Rules, a general disclosure obligation of the Company arises in respect of the Loan.

As at the date of this announcement, Ms. Zhao Ying is a Director and is, through The Hope Trust, interested in 700,000,000 Shares, representing 70% of the issued share capital of the Company. She is also, through The Hope Trust and Profit East, interested in an aggregate of 1,221,565,664 shares of China VAST, representing 73.98% of the issued share capital of China VAST. Therefore, Ms. Zhao Ying is a controlling shareholder of both the Company and China VAST. Accordingly, China VAST is a connected person of the Company under Chapter 14A of the Listing Rules.

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As one or more of the relevant applicable percentage ratios (as defined under the Listing Rules) in respect of the Loan under the Loan Agreement exceed 25% but all are less than 75%, the Loan Agreement and the Loan contemplated thereunder constitute a major and connected transaction of the Company under Chapter 14 and Chapter 14A of the Listing Rules, and are subject to the reporting, announcement, circular and independent shareholders' approval requirements under Chapter 14 and Chapter 14A of the Listing Rules.

INDEPENDENT BOARD COMMITTEE

An Independent Board Committee comprising Mr. Cheung Ying Kwan and Mr. Choi Hon Keung, Simon, being all the independent non-executive Directors except Dr. Wong Wing Kuen, Albert who is deemed to have a material interest in the Loan Agreement and the Loan contemplated thereunder by virtue of his position as an independent non-executive director of China VAST, will be formed in accordance with Chapter 14A of the Listing Rules to advise the Independent Shareholders on the Loan Agreement and the Loan contemplated thereunder.

INDEPENDENT FINANCIAL ADVISER

First Shanghai Capital Limited has been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders on the Loan Agreement and the Loan contemplated thereunder.

GENERAL

The EGM will be convened for the Independent Shareholders to consider and, if thought fit, approve the Loan Agreement and the Loan contemplated thereunder.

As at the date of this announcement, Tai Shing International Investment Company Limited is beneficially interested in 700,000,000 Shares, representing 70% of the issued share capital of the Company. As Tai Shing International Investment Company Limited is indirectly wholly-owned by TMF (Cayman) Ltd., the trustee of The Hope Trust (a discretionary trust founded by Ms. Zhao Ying who can influence how the trustee exercises its discretion), it and its associates are deemed to have a material interest in and will be required under the Listing Rules to abstain from voting on the relevant resolution(s) in relation to the Loan Agreement and the Loan contemplated thereunder at the EGM.

Save as aforementioned, to the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, no other Shareholder has a material interest in the Loan Agreement and the Loan contemplated thereunder and is therefore required to abstain from voting at the EGM for the relevant resolution(s).

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A circular containing, inter alia, (i) details of the Loan Agreement and the Loan contemplated thereunder; (ii) a letter from the Independent Board Committee to the Independent Shareholders in relation to the Loan Agreement and the Loan contemplated thereunder; (iii) a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in relation to the Loan Agreement and the Loan contemplated thereunder; (iv) other information required to be included in the circular under the Listing Rules; and (v) a notice convening the EGM is expected to be despatched to the Shareholders on or before 26 May 2021.

Shareholders and potential investors of the Company should be aware that the drawdown under the Loan Agreement is subject to the satisfaction or waiver (as applicable) of certain conditions precedent, and therefore the Loan may or may not eventually be drawn or consummated. Shareholders and potential investors of the Company should therefore exercise caution when dealing in the Shares. Persons who are in doubt as to the action they should take should consult their stockbrokers, bank managers, solicitors or other professional advisers.

On 7 May 2021, the Company entered into the Loan Agreement with China VAST, pursuant to which the Company has conditionally agreed to provide the Loan in the principal amount of RMB100,000,000 (or its equivalent in Hong Kong dollars) to China VAST for a term of one year at an interest rate of 12% per annum.

THE LOAN AGREEMENT

The principal terms of the Loan Agreement are set out as follows:

Date

7 May 2021

Parties

1. the Company, as lender
2. China VAST, as borrower

As at the date of this announcement, Ms. Zhao Ying is a Director and is, through The Hope Trust, interested in 700,000,000 Shares, representing 70% of the issued share capital of the Company. She is also, through The Hope Trust and Profit East, interested in an aggregate of 1,221,565,664 shares of China VAST, representing 73.98% of the issued share capital of China VAST. Therefore, Ms. Zhao Ying is a controlling shareholder of both the Company and China VAST. Accordingly, China VAST is a connected person of the Company under Chapter 14A of the Listing Rules.

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Principal Amount	: RMB100,000,000 (or its equivalent in Hong Kong dollars)
	The Group intends to fund the Loan with its internal
	resources.
Purpose	: All amounts borrowed by China VAST under the Loan shall
	be used for general working capital and shall not be used for
	any other purposes
Repayment Date	: The date falling twelve (12) months after the drawdown date
	or such other date as agreed in writing between China VAST
	and the Company (the ''Repayment Date'')
Interest Rate	: Twelve percent (12%) per annum (the ''Interest Rate''),
	payable on the Repayment Date
Drawdown Date	: A date set down in a duly completed drawdown notice and
	not later than 60 days from the date of the Loan Agreement
	(or such later date as may be agreed by the parties)
Drawdown	: On the drawdown date, the Company (through itself or its
	designated nominee(s)) shall make available, and China
	VAST (or its designated nominee(s)) shall draw, the entire
	amount of the Loan, which shall be wholly denominated in
	RMB or HK$, or partly denominated in HK$ and partly
	denominated in RMB. The Loan is not a revolving loan.
	If any part of the Loan is to be made in the PRC in RMB, that
	part may be implemented by way of an entrustment loan to
	China VAST or its designated nominee(s) in accordance with
	PRC laws and the drawdown shall refer to the drawdown
	payment to a mutually agreed financial institution.

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Conditions Precedent : The obligation of the Company to make the Loan is subject to the fulfilment by China VAST of the following conditions precedent no later than the drawdown date:

1. The representations and warranties of China VAST contained in the Loan Agreement shall be true and correct in all material respects on and as of the drawdown date, and no event of default shall have occurred and be continuing; and China VAST shall be in compliance in all material respects with all terms and conditions set forth in the Loan Agreement.
2. The approval by the Independent Shareholders of the Loan, the Loan Agreement and the transactions contemplated thereunder at the EGM in accordance with, and all other consents and acts required under, the Listing Rules being obtained and completed or, as the case may be, the relevant waiver from compliance with any of such rules having been obtained from the Stock Exchange.
3. The compliance with any other requirements under the Listing Rules or otherwise of the Stock Exchange or other regulatory authorities or any applicable laws and regulations which requires compliance at any time on or prior to the drawdown date in relation to the Loan (whether applicable to the Company or China VAST).
4. (If required) all requisite waivers, consents and approvals from any relevant government authorities or regulatory authorities or other relevant third parties in connection with the Loan, the Loan Agreement and the transactions contemplated thereunder having been obtained.
5. The Guarantee being executed and delivered by the parties thereto, the obligations of the Guarantor thereunder having become and remaining unconditional in accordance with its terms, and the Guarantee not having been terminated in accordance with its terms or otherwise.
6. Such other documents relating to any of the matters contemplated in the Loan Agreement as the Company may reasonably request.

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