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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 (Incorporated in the Cayman Islands with limited liability) TERMINATION OF THE FIRST LOAN AGREEMENT; AND THE ENTERING INTO OF THE SECOND LOAN AGREEMENT Reference is made to the announcements of the Company dated 4 November 2010 and 23 November2010 respectively, in relation to, inter alia, the subscription of Convertible Bonds in the principalamount of HK$35,154,000 issued by Cheong Tat pursuant to the CB Subscription Agreement and theGrant of First Loan in the amount of HK$63,000,000 to Cheong Tat pursuant to the First LoanAgreement.
As the applicable percentage ratios (as defined in the GEM Listing Rules), when aggregated with theCB Subscription, exceed 25%, but are less than 100%, the Grant of First Loan constitutes a majortransaction to the Company and is subject to notification, announcement and shareholders’ approvalrequirements under the GEM Listing Rules. Upon further negotiation with Cheong Tat, the Lenderand Cheong Tat mutually agreed to terminate the First Loan Agreement by entering into of theTermination Agreement.
The Board announces that on 29 November 2010 (after trading hours), the Lender entered into of theSecond Loan Agreement with Cheong Tat pursuant to which the Lender has agreed to provide a loanof HK$30,000,000 to Cheong Tat for a period of 12 months from the date of drawdown at an interestrate of 4.2% per annum.
The loan amount has been fully drawn upon the date of execution of the Second Loan Agreement.
As the applicable percentage ratios (as defined in the GEM Listing Rules) in respect of the Grant ofSecond Loan, when aggregated with the CB Subscription, are more than 5% but less than 25%, theGrant of Second Loan constitutes a discloseable transaction to the Company pursuant to Rule19.06(2) of the GEM Listing Rules and is subject to reporting and announcement requirements underChapter 19 of the GEM Listing Rules.
Reference is made to the announcements of the Company dated 4 November 2010 and 23 November2010 respectively, in relation to, inter alia, the subscription of Convertible Bonds in the principalamount of HK$35,154,000 of Cheong Tat pursuant to the CB Subscription Agreement and theprovision of loan in the amount of HK$63,000,000 to Cheong Tat pursuant to the First LoanAgreement (collectively, the ‘‘Announcements’’).
As the applicable percentage ratios (as defined in the GEM Listing Rules), when aggregated with theCB Subscription, exceed 25%, but are less than 100%, the Grant of First Loan constitutes a majortransaction to the Company and is subject to notification, announcement and shareholders’ approvalrequirements under the GEM Listing Rules. Upon further negotiation with Cheong Tat, the Lender andCheong Tat mutually agreed to terminate the First Loan Agreement by entering into of the TerminationAgreement.
The Board announces that on 29 November 2010, the Lender entered into of the Second LoanAgreement with Cheong Tat with details as follows: (1) Cheong Tat International Development Limited, as the Borrower; (2) Megamillion Asia Limited, a wholly-owned subsidiary of the To the best of the Directors’ knowledge, information and belief havingmade all reasonable enquiries, save for the Announcements, CheongTat and its ultimate beneficial owner(s) are third parties independent ofand not connected with the Company and its connected persons (asdefined in the GEM Listing Rules).
Interest shall accrue on the loan amount at the rate of 4.2% per annum.
Twelve calendar months after the date of drawdown of the loan.
Total outstanding principal and interest payable to the Lender shall befully repaid and discharged on or before the end of the term of theloan.
The loan amount has been fully drawn upon the date of execution of the Second Loan Agreement.
Cheong Tat, a company incorporated in Hong Kong with limited liability, is an investment holdingcompany. Cheong Tat owns the entire 100% equity interest in the PRC Target which in turn holds 60%equity interest in each of 承德五穀農莊食品有限公司 and 承德綠豐生態農業科技發展有限公司(collectively, the ‘‘Operating Companies’’). Pursuant to the CB Subscription Agreement dated 4November 2010, the Lender has subscribed for the Convertible Bonds in the principal amount ofHK$35,154,000 at the conversion price of HK$620 per conversion share. In the event that theConvertible Bonds are converted in full at the conversion price, a total of 56,700 conversion shares willbe issued, representing 567% of the existing issued share capital of Cheong Tat and approximately85.0% of the issued share capital of Cheong Tat as enlarged by the issue of the conversion shares.
The Operating Companies are headquartered in Chengde City, Hebei Province, the PRC. 承德五穀農莊食品有限公司 is principally engaged in the manufacturing and sales of instant noodle products while承德綠豐生態農業科技發展有限公司 is principally engaged in the production and sale of instant soup,freeze-dried vegetable products and air-dried vegetable products.
REASONS FOR TERMINATION OF THE FIRST LOAN AGREEMENT The Group is principally engaged in brand management and is acting as a sourcing agent for reputablebuyers in different kinds of products. In addition, it is the Group’s corporate strategy to explore otherindustries with good business potential and growth prospects.
As previously disclosed, it is the present intention of the Company to convert the Convertible Bondsand consolidate its control in Cheong Tat. The loan amount as contemplated under the First LoanAgreement is intended to be used by Cheong Tat as partial payment for the total consideration ofRMB160 million payable by the PRC Target for the acquisition of the 60% interest in each of theOperating Companies.
As the applicable percentage ratios (as defined in the GEM Listing Rules), when aggregated with theCB Subscription, exceed 25% but are less than 100%, the Grant of First Loan constitutes a majortransaction to the Company and is subject to notification, announcement and shareholders’ approvalrequirements under the GEM Listing Rules.
The decision to terminate the First Loan Agreement and to enter into of the Second Loan Agreementwas arrived at in consideration of the timing of which the loan amount can be utilized by Cheong Tatfor its commitments and operations. Further financing activity, if necessary, will be subject tocompliance with the GEM Listing Rules.
Given that the proposed arrangement as contemplated under the Grant of Second Loan to support thecontinued development of Cheong Tat, apart from the loan amount, does not differ in substance fromthe Grant of First Loan, the Directors consider that the terms as contemplated under the termination ofthe First Loan Agreement and the Grant of Second Loan are fair and reasonable and are in the interestsof the Company and the Company’s shareholders as a whole.
As the applicable percentage ratios (as defined in the GEM Listing Rules) in respect of the Grant ofSecond Loan, when aggregated with the CB Subscription, are more than 5% but less than 25%, theGrant of Second Loan constitutes a discloseable transaction to the Company pursuant to Rule 19.06(2)of the GEM Listing Rules and is subject to reporting and announcement requirements under Chapter 19of the GEM Listing Rules.
‘‘Borrower’’ or ‘‘Cheong Tat’’ Cheong Tat International Development Limited, a company incorporated in Hong Kong with limited liability the subscription by Megamillion of the Convertible Bonds issued byCheong Tat pursuant to the CB Subscription Agreement the conditional convertible bonds subscription agreement dated 4 November 2010 entered into between Megamillion and Cheong Tat inrelation to the subscription of the Convertible Bonds, subject to theterms and conditions contained therein Best Miracle International Limited, a company incorporated in theCayman Islands with limited liability and the issued Shares of whichare listed on GEM the convertible bonds in the principal amount of HK$35,154,000 issuedby Cheong Tat to Megamillion pursuant to the CB SubscriptionAgreement The loan agreement dated 23 November 2010 entered into between theLender and Cheong Tat in relation to the provision of a loan in theamount of HK$63,000,000 extended to Cheong Tat by the Lender,which is duly terminated on 29 November 2010 the Growth Enterprise Market of the Stock Exchange the Rules Governing the Listing of Securities on GEM the provision of a loan in the amount of HK$63,000,000 extended toCheong Tat by the Lender pursuant to the First Loan Agreement the provision of a loan in the amount of HK$30,000,000 extended toCheong Tat by the Lender pursuant to the Second Loan Agreement the Hong Kong Special Administrative Region of the PRC ‘‘Lender’’ or ‘‘Megamillion’’ Megamillion Asia Limited, a company incorporated in the BritishVirgin Islands and an indirect wholly-owned subsidiary of theCompany 承德五穀農莊食品有限公司 (Chengde Wugu Farming & Food Co.
Ltd.*) and 承德綠豐生態農業科技發展有限公司 (Chengde LufengFarming & Technology Co. Ltd.*), being companies incorporated inthe PRC and principally engaged in the production and sale of instantnoodle products and soup base respectively 青島恆興盛商貿有限公司 (Qingdao Hengxingsheng Commercial TradeCo. Ltd.*), a company incorporated in the PRC, a wholly-ownedsubsidiary of Cheong Tat The loan agreement dated 29 November 2010 entered into between theLender and Cheong Tat pursuant to which the Lender has agreed toprovide the loan amount of HK$30,000,000 to Cheong Tat upon andsubject to the terms and conditions contained therein ordinary share(s) of HK$0.001 each in the capital of the Company the termination agreement dated 29 November 2010 entered intobetween the Lender and Cheong Tat to terminate the First LoanAgreement Hong Kong dollar(s), the lawful currency of Hong Kong Chief Executive Officer and Executive Director As at the date of this announcement, Ms. Chan Lai Kwan Rainbow, Ms. Wong Yuet May Jeremy, Mr. Chan Fu Kei and Mr.
Too Shu Wing are executive Directors, and Mr. Chan Tak Yan, Mr. Orr Joseph Wai Shing and Mr. Lam Raymond Shiu Cheung are independent non-executive Directors.
This announcement, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this announcement is accurate and complete in all material respects and not misleading or deceptive, and that there are no other matters the omission of which would make any statement herein or this announcement misleading.
This announcement will remain on the ‘‘Latest Company Announcements’’ page of the GEM website at www.hkgem.com forat least seven days from the date of its publication and the Company’s website at www.bestmiracle.com.hk.

Source: http://www.cfbgroup.com.hk/userfiles/GLN20101129043.pdf