Shangri La Asia : Continuing Connected Transaction - Renewal of Hotel Management Agreement in relation to Kerry Hotel Pudong, Shanghai

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 announcement.

(Incorporated in Bermuda with limited liability) website: www.ir.shangri-la.com

(Stock code: 00069)

CONTINUING CONNECTED TRANSACTION

RENEWAL OF HOTEL MANAGEMENT AGREEMENT IN RELATION TO KERRY HOTEL PUDONG, SHANGHAI

Reference is made to the 2013 Announcement regarding the renewal of the Hotel Management Agreement entered into between SLIM-HK (as manager) and KHPU (as owner) in relation to the provision of Hotel Management Services by SLIM-HK to the Hotel (a hotel owned by KHPU) for a consecutive 3-year term which expired on 5 January 2017.

Pursuant to the terms of the Hotel Management Agreement, SLIM-HK has decided to renew the Hotel Management Agreement for another consecutive 3-year term which will expire on 5 January 2020. All existing terms and conditions of the Hotel Management Agreement will remain unchanged.

SLIM-HK is a subsidiary of the Company. KHPU is owned as to 40.8% by KPL which in turn is a non-wholly owned subsidiary of KHL (a substantial shareholder of the Company). Accordingly, KHPU is an associate of the Company's substantial shareholder and is a connected person of the Company.

The renewal of the Hotel Management Agreement whereby SLIM-HK will continue to provide Hotel Management Services to the Hotel constitutes a continuing connected transaction for the Company under the Listing Rules.

As the Caps for each financial year in the renewed term of the Hotel Management Agreement exceed 0.1% but are less than 5% of the applicable Percentage Ratios, the Company is subject to announcement and reporting requirements but is exempt from independent shareholders' approval requirement. Details of the Hotel Management Agreement and the actual amount of the Fees will be disclosed in the future annual reports and accounts of the Company in accordance with the Listing Rules.

INTRODUCTION

Reference is made to the 2013 Announcement regarding the renewal of the Hotel Management Agreement entered into between SLIM-HK (as manager) and KHPU (as owner) in relation to the provision of Hotel Management Services by SLIM-HK to the Hotel for a consecutive 3-year term which expired on 5 January 2017.

RENEWAL OF THE HOTEL MANAGEMENT AGREEMENT

Pursuant to the terms of the Hotel Management Agreement, SLIM-HK has decided to renew the Hotel Management Agreement for another consecutive 3-year term which will expire on 5 January 2020. All existing terms and conditions of the Hotel Management Agreement will remain unchanged.

EXPECTED MAXIMUM ANNUAL AGGREGATE AMOUNT OF FEES

Based on the terms of the Hotel Management Agreement, the expected occupancy of the Hotel, possible inflation, reasonable increase in occupancy and reasonable allowance for unexpected increase in occupancy and/or room rate of the Hotel, the Board expects that the Cap(s) will not exceed the following amounts:

Financial year ending 31 December 2017	Cap (US$) 4,600,000
31 December 2018	4,800,000
31 December 2019	5,000,000

If any of the Caps stated above is exceeded, the Company will re-comply with the requirements under Chapter 14A of the Listing Rules.

REASON FOR RENEWAL OF THE HOTEL MANAGEMENT AGREEMENT

As the provision of hotel management and related services is one of the main businesses of the Group, it is in the interest of the Group to renew the Hotel Management Agreement.

The Directors (including the independent non-executive Directors) take the view that the renewal of the Hotel Management Agreement is in the ordinary and usual course of business of the Group and believe that the terms of the Hotel Management Agreement remain as normal commercial terms and remain fair and reasonable and in the interests of the Company and its shareholders as a whole.

The Board confirms that none of the Directors had material interest in the Hotel Management Agreement and accordingly none of the Directors was required to abstain from voting on the resolutions in relation to the renewal of the Hotel Management Agreement.

INFORMATION ABOUT THE GROUP, SLIM-HK AND KHPU

The principal activities of the Group are the ownership and operation of hotels and associated properties and the provision of hotel management and related services. The Company's subsidiaries are also the registered proprietors of various trademarks and service marks in various countries, including the brand names "Shangri-La", "Hotel Jen", "Traders", "Rasa", "Summer Palace" and "Shang Palace" and related devices and logos.

The principal activities of SLIM-HK are the provision of hotel management, marketing, communication, reservation, consultancy and other hotel related services.

The principal activities of KHPU are the ownership and development of a mixed-use development comprises the Hotel, offices, services suites/services apartments, commercial and related ancillary facilities.

LISTING RULES IMPLICATION

SLIM-HK is a subsidiary of the Company. KHPU is owned as to 40.8% by KPL which in turn is a non-wholly owned subsidiary of KHL (a substantial shareholder of the Company). Accordingly, KHPU is an associate of the Company's substantial shareholder and is a connected person of the Company.

The renewal of the Hotel Management Agreement whereby SLIM-HK will continue to provide Hotel Management Services to the Hotel constitutes a continuing connected transaction for the Company under the Listing Rules.

As the Caps for each financial year in the renewed term of the Hotel Management Agreement exceed 0.1% but are less than 5% of the applicable Percentage Ratios, the Company is subject to announcement and reporting requirements but is exempt from independent shareholders' approval requirement. Details of the Hotel Management Agreement and the actual amount of the Fees will be disclosed in the future annual reports and accounts of the Company in accordance with the Listing Rules.

DEFINITIONS

"2013 Announcement" the announcement of the Company dated 11 June 2013

disclosing the previous renewal of the Hotel Management Agreement

"Allgreen" Allgreen Properties Limited, a company incorporated in Singapore with limited liability, and is associate of KHL

"associate" has the meaning ascribed to it in the Listing Rules

"Board" the board of Directors

"Cap(s)" the expected maximum annual aggregate amount(s) of the Fees for a financial year

"Company" Shangri-La Asia Limited, an exempted company incorporated in Bermuda with limited liability, the shares of which are primarily listed on the Main Board of the Stock Exchange with secondary listing on the Singapore Exchange Securities Trading Limited

"connected person" has the meaning ascribed to it in the Listing Rules "Directors" directors of the Company

"Fees" the fees payable by KHPU to SLIM-HK and/or the Group for the Hotel Management Services under the Hotel Management Agreement

"Group" the Company and its subsidiaries

"Hotel" Kerry Hotel Pudong, Shanghai, a hotel owned by KHPU

"Hotel Management Agreement"

the hotel management agreement dated 2 June 2010 entered into between SLIM-HK (as manager) and KHPU (as owner) for the provision of Hotel Management Services by SLIM-HK to the Hotel

"Hotel Management Services"

hotel management services involving the provision of hotel management, marketing, communication and reservation services by SLIM-HK as per the Hotel Management Agreement

"KHL" Kerry Holdings Limited, a substantial shareholder of the Company

"KHPU" Shanghai Pudong Kerry City Properties Co, Limited 上海浦東 嘉里城房地產有限公司, a sino-foreign equity joint venture

company incorporated in PRC and is ultimately owned by the Company, KPL, Allgreen and a party independent of the Company in the proportion of 23.2%, 40.8%, 16% and 20% respectively

"KPL" Kerry Properties Limited, an exempted company incorporated in Bermuda with limited liability, the shares of which are listed on the Main Board of the Stock Exchange

"Listing Rules" the Rules Governing the Listing of Securities on the Stock

Exchange

"Percentage Ratios" has the meaning ascribed to it in Chapter 14 of the Listing

Rules

"PRC" the People's Republic of China

"SLIM-HK" Shangri-La International Hotel Management Limited, a company incorporated in Hong Kong and is a wholly-owned subsidiary of the Company

"Stock Exchange" The Stock Exchange of Hong Kong Limited "substantial shareholder" has the meaning ascribed to it in the Listing Rules

On behalf of the Board of Shangri-La Asia Limited KUOK Hui Kwong Chairman

Hong Kong, 26 January 2017