CHTC Fong International : Discloseable Transaction in relation to the Factoring Agreements

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CHTC FONG'S INTERNATIONAL COMPANY LIMITED 中 國 恒 天 立 信 國 際 有 限 公 司

(Incorporated in Bermuda with limited liability)

(Stock Code: 641)

DISCLOSEABLE TRANSACTION

IN RELATION TO THE FACTORING AGREEMENTS

On 7 May 2021 (after the market close), certain indirect wholly-owned subsidiaries of the Company entered into the three non-recourse Factoring Agreements with Horizon Factoring, pursuant to which Horizon Factoring has agreed to provide accounts receivable factoring services in an aggregate principal sum of RMB49,334,388.14 (equivalent to approximately HK$58,708,000) to the subsidiaries of the Company in accordance with the terms and conditions of the Factoring Agreements. Each of the Factoring Agreements contains similar major terms to each other.

As the highest applicable percentage ratio in respect of the transactions contemplated under the Factoring Agreements (on an aggregate basis) exceeds 5% but is less than 25%, such transactions constitute a discloseable transaction of the Company and is therefore subject to the reporting and announcement requirements but is exempt from the shareholders' approval requirement under Chapter 14 of the Listing Rules.

1. INTRODUCTION

The Board hereby announces that on 7 May 2021 (after the market close), certain indirect wholly-owned subsidiaries of the Company entered into the three non-recourse Factoring Agreements with Horizon Factoring, pursuant to which Horizon Factoring has agreed to provide accounts receivable factoring services in an aggregate principal sum of RMB49,334,388.14 (equivalent to approximately HK$58,708,000) to the subsidiaries of the Company in accordance with the terms and conditions of the Factoring Agreements. Each of the Factoring Agreements contains similar major terms to each other.

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II. THE FACTORING AGREEMENTS

Below is the summary of the principal terms and conditions of the Factoring Agreements, each of which contains similar major terms to each other.

1. Factoring Agreement I

Date of agreement	7 May 2021
Parties	(i) Horizon Factoring (as factor);
	(ii) Tycon Alloy (Shenzhen) (as seller); and
	(iii) FNE (Shenzhen) (as debtor)
Transfer of accounts	Horizon Factoring has agreed to provide accounts
receivable	receivable factoring services in the principal amount
	of RMB27,784,698.41 (equivalent to approximately
	HK$33,064,000) to Tycon Alloy (Shenzhen) in
	accordance with the terms and conditions of the
	Factoring Agreement I
Type of financing	Non-recourse, i.e. if FNE (Shenzhen) fails to pay any
	amounts due to Horizon Factoring under the Factoring
	Agreement I owing to credit reasons, Horizon
	Factoring has no right to claim any outstanding amount
	from Tycon Alloy (Shenzhen)
Financing term	2 years from the date of signing of the Factoring
	Agreement I
Handling fee I	RMB30,000 (equivalent to approximately HK$35,700)
	payable by FNE (Shenzhen) to Horizon Factoring
	within 3 working days after the signing of the
	Factoring Agreement I

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Handling fee II	RMB1,844,209.36 (equivalent to approximately
	HK$2,195,000) which is calculated at the interest
	rate of 5.9% per annum on the outstanding factoring
	principal amount and shall be payable by FNE
	(Shenzhen) to Horizon Factoring by 8 quarterly
	instalments
Repayment of the	RMB27,784,698.41 (equivalent to approximately
factoring principal	HK$33,064,000) repayable by FNE (Shenzhen) to
amount	Horizon Factoring by 8 equal quarterly instalments
	of RMB3,473,087.30 (equivalent to approximately
	HK$4,133,000)
Guarantors	FNE (Guangdong), FNE (Shenzhen), MF (Zhongshan)
	and Tycon Alloy (Zhongshan)

1. Factoring Agreement II

Date of agreement	7 May 2021
Parties	(i) Horizon Factoring (as factor);
	(ii) Tycon Alloy (Zhongshan) (as seller); and
	(iii) Tycon Alloy (Shenzhen) (as debtor)
Transfer of accounts	Horizon Factoring has agreed to provide accounts
receivable	receivable factoring services in the principal amount
	of RMB13,927,668.90 (equivalent to approximately
	HK$16,574,000) to Tycon Alloy (Zhongshan) in
	accordance with the terms and conditions of the
	Factoring Agreement II
Type of financing	Non-recourse, i.e. if Tycon Alloy (Shenzhen) fails
	to pay any amounts due to Horizon Factoring
	under the Factoring Agreement II owing to credit
	reasons, Horizon Factoring has no right to claim any
	outstanding amount from Tycon Alloy (Zhongshan)

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Financing term	2 years from the date of signing of the Factoring
	Agreement II
Handling fee I	RMB30,000 (equivalent to approximately HK$35,700)
	payable by Tycon Alloy (Zhongshan) to Horizon
	Factoring within 3 working days after the signing of
	the Factoring Agreement II
Handling fee II	RMB924,449.04 (equivalent to approximately
	HK$1,100,000) which is calculated at the interest
	rate of 5.9% per annum on the outstanding factoring
	principal amount and shall be payable by Tycon
	Alloy (Shenzhen) to Horizon Factoring by 8 quarterly
	instalments
Repayment of the	RMB13,927,668.90 (equivalent to approximately
factoring principal	HK$16,574,000) repayable by Tycon Alloy (Shenzhen)
amount	to Horizon Factoring by 8 equal quarterly instalments
	of RMB1,740,958.61 (equivalent to approximately
	HK$2,072,000).
Guarantors	FNE (Guangdong), FNE (Shenzhen), MF (Zhongshan)
	and Tycon Alloy (Shenzhen)

1. Factoring Agreement III

Date of agreement	7 May 2021
Parties	(i) Horizon Factoring (as factor);
	(ii) FNE (Shenzhen) (as seller); and
	(iii) FNE (Guangdong) (as debtor)
Transfer of accounts	Horizon Factoring has agreed to provide accounts
receivable	receivable factoring services in the principal amount
	of RMB7,622,020.83 (equivalent to approximately
	HK$9,070,000) to FNE (Shenzhen) in accordance with
	the terms and conditions of the Factoring Agreement
	III

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Type of financing	Non-recourse, i.e. if FNE (Guangdong) fails to pay any
	amounts due to Horizon Factoring under the Factoring
	Agreement III owing to credit reasons, Horizon
	Factoring has no right to claim any outstanding amount
	from FNE (Shenzhen)
Financing term	2 years from the date of signing of the Factoring
	Agreement III
Handling fee I	RMB20,000 (equivalent to approximately HK$23,800)
	payable by FNE (Guangdong) to Horizon Factoring
	within 3 working days after the signing of the
	Factoring Agreement III
Handling fee II	RMB505,911.63 (equivalent to approximately
	HK$602,000) which is calculated at the interest rate of
	5.9% per annum on the outstanding factoring principal
	amount and shall be payable by FNE (Guangdong) to
	Horizon Factoring by 8 quarterly instalments
Repayment of the	RMB7,622,020.83 (equivalent to approximately
factoring principal	HK$9,070,000) repayable by FNE (Guangdong) to
amount	Horizon Factoring by 8 equal quarterly instalments
	of RMB952,752.60 (equivalent to approximately
	HK$1,134,000).
Guarantors	FNE (Guangdong), MF (Zhongshan), Tycon Alloy
	(Shenzhen) and Tycon Alloy (Zhongshan)

Guarantee

Each of the guarantors shall provide a joint and several irrevocable guarantee in favour of Horizon Factoring in respect of the outstanding factoring principal amount, handling fees and default payment payable by the debtor to Horizon Factoring under the respective Factoring Agreements.

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