CHINA VERED FIN's subsidiary plans to issue consideration shares for the acquisition of all issued shares of Templewater One Limited and Mighty Commander Limited under general authorization

According to the announcement from CHINA VERED FIN (00245) on the Zhitong Finance APP, on September 27, 2024 (after the trading hours of the Stock Exchange), the company (as the guarantor) and the buyer, CM Strategic Investment Management Holdings Limited (an indirect wholly-owned subsidiary of the company), entered into two separate sale and purchase agreements with various sellers. Seller A (TW One Limited) agreed to sell and the buyer agreed to acquire all the issued shares of Target Company A, and Seller B (Darth Holdings Limited) agreed to sell and the buyer agreed to acquire all the issued shares of Target Company B. The target companies (Templewater One Limited and Mighty Commander Limited) are special purpose companies of the sellers, with their main assets being investments in the underlying SCL shares, totaling 7.08% of the issued share capital of SCL. The total consideration payable by the company to the sellers will be USD 23.5 million, of which USD 7.05 million will be paid in cash, and USD 16.45 million will be paid through the issuance and distribution of consideration shares by the company. The consideration for the sale shares payable to each seller will be calculated based on their respective proportion of the underlying SCL shares held. The cash consideration payable under the agreements will be funded by the company through its internal resources. Under the agreements, a total of 2.468 billion consideration shares will be issued and distributed to the sellers, equivalent to approximately 7.11% of the company's issued share capital as of the date of this announcement, and approximately 6.64% of the enlarged issued share capital after the issuance and distribution of consideration shares (assuming the completion of the agreements). The issue price of each consideration share is HKD 0.052, representing a premium of approximately 2.0% over the closing market price of HKD 0.051 per share on the Stock Exchange on September 27, 2024 (i.e., the date of the agreements). The announcement stated that since 2022, investments have been made in SCL indirectly through Templewater LP. It is understood that other investors in SCL include several well-known investment banks and asset management groups. The SCL group has diversified business interests, including managing assets of approximately USD 1.6 billion and owning two licensed banks. The directors believe that the SCL group has reached a certain scale to expand its asset management and banking service coverage. The acquisition provides an opportunity to enhance shareholder value by acquiring direct equity in SCL. The investment period in the underlying SCL shares is 3 to 5 years, with the exit strategy focusing on selling the underlying SCL shares or the initial public offering of SCL. In addition, the company believes that the downside protection provided by the exit terms can mitigate the investment risks of the acquisition. As both the company and SCL are engaged in asset management business, it is planned to collaborate with the SCL group and explore potential synergies post-completion, such as jointly launching financial investment products