Hsin Chong Construction : Further Issue of Consideration Preference Shares and Extension of Time In Relation to the Delivery of the Land Use Rights Certificate for the Remaining Land

E160130084Ann.indd

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HSIN CHONG CONSTRUCTION GROUP LTD.

新昌營造集團有限公司 *

(Incorporated in Bermuda with limited liability)

(Stock Code: 00404)

FURTHER ISSUE OF CONSIDERATION PREFERENCE SHARES AND EXTENSION OF TIME IN RELATION TO THE DELIVERY OF THE LAND USE RIGHTS CERTIFICATE FOR THE REMAINING LAND

Reference is made to the announcements (the "Announcements") of Hsin Chong Construction Group Ltd. (the "Company") dated 4 November 2014, 24 December 2014, 8 January 2015 and 30 June 2015 and the circular dated 4 November 2014 (the "Circular") in relation to, among others, the acquisition of a property development project in the PRC involving the issue of Consideration Preference Shares. Unless the context otherwise requires, terms defined in the Circular have the same meanings when used in this announcement.

As stated in the Announcements, based on the final Completion Accounts agreed for the purposes of the Acquisition and assuming no deduction of any of the Holdback Amount or other claims, the Acquisition consideration was determined to be HK$7,450,726,561. A Holdback Amount of HK$665 million in total has not yet been paid, pending (i) the determination of the aggregate amount of fee, fine or penalty (if any) charged (collectively the "Charges") under the relevant land grant contract or applicable PRC laws at any time after Completion but on or before 31 December 2015 in respect of any delay in the development of Land 2, Land 3, Land 4 or Land 5 or the delay in completion of Land 1 on or before the Cut- off Date (for which HK$310 million of the Acquisition consideration has been held back); and

(ii) the issue of land use rights certificates for the Remaining Land (for which HK$355 million of the Acquisition consideration has been held back). The Acquisition consideration would be reduced by the amount of the Charges or if the land use rights certificates were not issued on or before 31 December 2015 or such later date as may be agreed between the Vendor and the Purchaser.

The Acquisition Agreement also provided for the upward adjustment of the Acquisition consideration in respect of the aggregate Certified Work Value that is settled by any Remaining Prepayments as at 31 March 2014 (including the Refunded Prepayments).

Further Issue of Consideration Preference Shares

The total amount of the Charges was HK$11.09 million and the aggregate Certified Work Value that is settled by any Remaining Prepayments as at 31 March 2014 (including the Refunded Prepayments) was approximately HK$12.21 million. Accordingly, of the HK$310 million of Acquisition consideration held back for the Charges, HK$298.91 million is now payable by the Company together with the upward adjustment of HK$12.21 million. The total of HK$311.12 million payable has been satisfied by the issue and allotment of 259,263,039 Consideration Preference Shares credited as fully paid at HK$1.2 per Consideration Preference Share on 15 January 2016.

These additional Consideration Preference Shares, if fully converted into Shares at the prevailing one for one conversion ratio, would give rise to 259,263,039 Shares representing approximately 5.00% of the number of Shares currently in issue and approximately 4.76% of the number of Shares currently in issue as enlarged by the issue of the Conversion Shares. The Consideration Preference Shares carry restrictions on conversion and, in limited circumstances, transfer as set out in the Bye-laws of the Company.

Extension of Time in relation to the Delivery of the Land Use Rights Certificate for the Remaining Land

Under the Acquisition Agreement, HK$355 million of the Acquisition consideration was held back pending the issue to WFOE 4 of an unencumbered land use rights certificate in its name for the Remaining Land. As at 31 December 2015, the land use rights certificate has not as yet been issued but the Group has received confirmation from the Local Government and/or Land Bureau that the grant of the land use right certificates is being processed based on the Group's submission and revision of the overall development plan. Accordingly, the Vendor and the Purchaser have agreed to extend the cut-off date for the delivery of the land use rights certificate to 30 June 2016. If unencumbered land use rights certificate for the Remaining Land is not issued to WFOE 4 by that date, then the Acquisition consideration will be reduced by HK$355 million and no further Consideration Preference Shares will be issuable under the Acquisition Agreement.

By Order of the Board of

Hsin Chong Construction Group Ltd. Joseph CHOI Kin Hung

Executive Director and Chief Executive Officer

Hong Kong, 15 January 2016

As at the date of this announcement, the Board comprises Ir. Joseph CHOI Kin Hung (Chief Executive Officer), Mr. LUI Chun Pong (Chief Financial Officer), Mr. Wilfred WU Shek Chun (Director of Mergers and Acquisitions) and Mr. ZHOU Wei as Executive Directors; Mr. LIN Zhuo Yan (Non-executive Chairman), Mr. YAN Jie, Mr. CHEN Lei and Mr. CHUI Kwong Kau as Non-executive Directors; and Mr. CHENG Sui Sang, Mr. GAO Jingyuan, Ms. LEE Jai Ying and Mr. KWOK, Shiu Keung Ernest as Independent Non-executive Directors.

* for identification purposes only