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 the Cayman Islands with limited liability)

(Stock Code: 2678)

DISCLOSEABLE TRANSACTION
(1) THE S&P AGREEMENT — ACQUISITION OF THE TARGET GROUP
(2) THE SUBSCRIPTION AGREEMENT — DEEMED DISPOSAL OF THE
EQUITY INTEREST IN TEXHONG WINNITEX
(3) THE JV TERM SHEET — GRANT OF PUT OPTION IN
TEXHONG WINNITEX

(1) THE S&P AGREEMENT — ACQUISITION OF THE TARGET GROUP

On 7 December 2018 (after trading hours), the Company entered into the S&P
Agreement with the Vendors and the guarantors for the sale and purchase of the
entire issued share capital of Winnitex Holdings and the entire equity interest of
Zhejiang Qing Mao for an aggregate consideration of approximately HK$1.35 billion.
The Target Group is principally engaged in the manufacture and sale of woven textile
fabrics in the PRC and Hong Kong.

(2) THE SUBSCRIPTION AGREEMENT — DEEMED DISPOSAL OF THE

EQUITY INTEREST IN TEXHONG WINNITEX

On 7 December 2018 (after trading hours), Texhong Winnitex, a wholly owned

subsidiary of the Company and the Subscribers entered into the Subscription
Agreement, pursuant to which Texhong Winnitex has agreed to allot and issue, and
the Subscribers have agreed to subscribe for the Subscription Shares at the
Subscription Price. The Subscription Shares represent 20% of the total number of
shares of Texhong Winnitex in issue upon Subscription Completion (as enlarged by
the allotment and issue of the Subscription Shares).

Pursuant to the Subscription Agreement, the Reorganisation shall take place, upon
which Texhong Winnitex shall become the holding company of the Target Group, the
Vietnam Business and the Nicaragua Business.

Upon the Subscription Completion, Texhong Winnitex will cease to be a direct

wholly-owned subsidiary of the Company, but will remain as a subsidiary of the
Company and the financial information of Texhong Winnitex and its subsidiaries will
be consolidated to the Company’s consolidated financial statements.

–1–
(3) THE JV TERM SHEET — GRANT OF PUT OPTION IN TEXHONG
WINNITEX

Pursuant to the JV Term Sheet, the Company granted the Put Option to the
Subscribers. The Put Option is exercisable by the Subscribers in their sole discretion
at any time after the occurrence of an event of default on the part of the Company or
at any time after the fourth anniversary of the Subscription Completion.

(4) IMPLICATIONS UNDER THE LISTING RULES

As the applicable percentage ratios in respect of the transaction contemplated under

the S&P Agreement are more than 5% but all applicable percentage ratios are below
25%, the entering into of the S&P Agreement constitutes a discloseable transaction of
the Company under Chapter 14 of the Listing Rules.

The Subscription constitutes a deemed disposal by the Company under Rule 14.29 of
the Listing Rules. As one or more of the applicable percentage ratios for the
Subscription under Rule 14.07 of the Listing Rules are more than 5% but all
applicable percentage ratios are below 25%, the Subscription by the Subscribers
constitutes a discloseable transaction of the Company under Chapter 14 of the Listing
Rules.

Pursuant to Rule 14.76(1) of the Listing Rules, as the applicable percentage ratios in
respect of the grant of the Put Option are more than 5% but all applicable percentage
ratios below 25%, the Put Option constitutes a discloseable transaction of the
Company under Chapter 14 of the Listing Rules.

(1) THE S&P AGREEMENT — ACQUISITION OF THE TARGET GROUP

Date

7 December 2018

Parties

(1) the Company

(2) the Vendors

(3) the Guarantors as guarantors of the Vendors

To the best of the Directors’ knowledge, information and belief, having made all
reasonable enquiries, the Vendors, their respective ultimate beneficial owners and the
Guarantors are third parties independent of the Company and the connected persons of
the Company.

The Vendors are investment holding companies.

–2–
Subject matter of the S&P Agreement

Pursuant to the S&P Agreement, the Vendors shall sell and the Company shall purchase
the entire issued share capital of Winnitex Holdings and the entire equity interest of
Zhejiang Qing Mao.

Consideration

The aggregate consideration was approximately HK$1.35 billion which shall be payable
by the Company in the following manner:

(1) 20.0% of the consideration (equivalent to approximately HK$269.46 million) shall

be paid to the Vendors as deposit upon signing of the S&P Agreement;

(2) 75.0% of the consideration (equivalent to approximately HK$1.01 billion) shall be

paid to the Vendors on the Completion Date;

(3) 5.0% of the consideration shall be withheld by the Company and paid to the
Vendors after the Completion Date after deduction (if any) as disclosed in the
paragraph headed ‘‘Adjustment of Consideration’’ below.

The consideration was determined after arm’s length negotiation between the Company
and the Vendors on normal commercial terms principally with reference to the Adjusted
NAV, plus an agreed premium attributable to the intangible brand value of the Target
Group.

Adjustment of Consideration

Within 30 days after the signing of the S&P Agreement, the Company shall procure an
independent accountant to certify the amount of the Adjusted NAV and the final
confirmed amount of the Adjusted NAV (the ‘‘Confirmed Certified NAV’’) shall be
determined in accordance with the mechanism under the S&P Agreement.

In the event that the Confirmed Certified NAV is less than the Adjusted NAV, the
consideration shall be reduced by an amount equivalent to the difference. The Company
shall be entitled to deduct such shortfall from the 5% of the consideration withheld by
the Company, and the Vendors shall pay the remaining balance within five business
days after the Confirmed Certified NAV is determined if the shortfall exceeds the
amount of the sum withheld by the Company.

In the event that the Confirmed Certified NAV is not less than the Adjusted NAV, the
Company shall (i) release the full amount of the 5% of the consideration to the
Vendors; and (ii) pay to the Vendors an aggregate amount in cash equivalent to the
difference between the Confirmed Certified NAV and the Adjusted NAV within five
business days after the Confirmed Certified NAV is determined.

–3–
Conditions precedent

The S&P Completion is conditional upon the following conditions being satisfied or
waived:

(a) all filing, authorisations, confirmations, clearance, permissions, necessary approvals

and consents (whether from government agency and otherwise) as may be required
to be obtained by the Vendors in respect of the S&P Agreement and the
transactions contemplated thereunder have been obtained and not having been
revoked;

(b) all necessary filing, authorisations, confirmations, clearance, permissions, approvals

and consents (whether from government agency and otherwise) as may be required
to be completed/obtained in respect of the reorganisation described in paragraph (c)
below having been completed/obtained and not having been revoked;

(c) the reorganisation having been completed, which includes, amongst others, the
transfer and renunciation of ownership of certain equipment held by a fellow
subsidiary of Zhejiang Qing Mao to the Target Group;

(d) the Subscription Agreement having been entered into; and

(e) the warranties remaining true and accurate in all material respects and not
misleading in any material respect as of the date of the S&P Completion by
reference to the facts and circumstances subsisting as at the date of the S&P
Completion.

The Company shall be entitled (but not obliged) to waive any of the conditions
precedent set out above by serving a notice in writing to the Vendors.

If any of the conditions set out above has not been fulfilled (or waived by the Company
in whole or in part) on or before the Long Stop Date, the S&P Agreement shall cease
and terminate and the parties to the S&P Agreement shall not have any obligations and
liabilities hereunder save for any antecedent breaches of the terms thereof.

S&P Completion

The S&P Completion shall take place on the fifth business day after the conditions set
out in the paragraph headed ‘‘Conditions precedent’’ above shall have been fulfilled or
(as the case may be) waived by the Company on or before the Long Stop Date, or such
other date as the Company and the Vendors may agree in writing but in any event shall
not be earlier than 2 January 2019.

–4–
 Non-compete undertakings

Each of the Vendors and the current directors of the Target Group has covenanted with
and undertaken to the Company and each member of the Target Group, as a separate
and independent agreement, that it or he will not whether acting alone or with any other
person:

(a) during the S&P Restricted Period, carry on or be involved in the operation and
management of; or be employed or engaged in or with any business or undertaking
which is involved in the production and/or sales of textile products or use a trade
name which is similar to ‘‘Winnitex’’;

(b) during the S&P Restricted Period, solicit any employees of the Target Group to
terminate his or her employment with the Target Group; or

(c) at any time after the S&P Completion, disclose to any person, any confidential or
commercially sensitive information of the Target Group which may have come to
his knowledge before the S&P Completion.

(2) THE SUBSCRIPTION AGREEMENT — DEEMED DISPOSAL OF THE EQUITY

INTEREST IN TEXHONG WINNITEX

Date

7 December 2018

Parties

(1) Texhong Winnitex as the issuer

(2) the Company as the guarantor of Texhong Winnitex

(3) Messrs. Wai Chi Kwok, Jacob and Wai Chi Wah, Nelson as the Subscribers

To the best of the Directors’ knowledge, information and belief, having made all
reasonable enquiries, the Subscribers are third parties independent of the Company and
the connected persons of the Company.

The Subscription

Pursuant to the Subscription Agreement, Texhong Winnitex has agreed to allot and
issue, and the Subscribers have agreed to subscribe for Subscription Shares at the
Subscription Price. The Subscription Shares represent 20% of the total number of shares
Texhong Winnitex in issue upon the Subscription Completion (as enlarged by the
allotment and issue of the Subscription Shares).

Pursuant to the Subscription Agreement, the Reorganisation shall take place, upon
which Texhong Winnitex shall become the holding company of the Target Group, the
Vietnam Business and the Nicaragua Business.

–5–
Subscription Price

The Subscription Price shall be determined based on the formula set out below:

Subscription Price = (A + B1 + B2) x (1/0.8 – 1)

A = total consideration of the S&P Agreement

B1 = the pro forma combined net asset value of Merit Horizon as at the
Subscription Completion Accounts Date
B2 = the consolidated net asset value of Texhong Americas as at the
Subscription Completion Accounts Date

The Subscription Price shall be payable by the Subscribers in the following manner:

(1) If the Reorganisation has been completed on the Subscription Completion Date,
then the Subscription Price shall be payable by the Subscribers in full on the
Subscription Completion Date.

(2) If the Reorganisation has not been completed on the Subscription Completion Date,
in three tranches in the following manner:

Date of payment Amount payable

First Tranche Subscription Completion Date (A) x (1/0.8 – 1)

Second Tranche Upon completion of the (B1) x (1/0.8 – 1)

acquisition of the Vietnam
Business by Texhong Winnitex

Third Tranche Upon completion of the (B2) x (1/0.8 – 1)

acquisition of the Nicaragua
Business by Texhong Winnitex

A = total consideration of the S&P Agreement

B1 = the pro forma combined net asset value of Merit Horizon as at the
Subscription Completion Accounts Date
B2 = the consolidated net asset value of Texhong Americas as at the
Subscription Completion Accounts Date

The Subscription Price was determined after arm’s length negotiation between the
Company and the Subscribers on normal commercial terms principally with reference to
the total consideration of the S&P Agreement plus the consolidated or pro forma
combined net asset value of Merit Horizon and Texhong Americas.

The Subscription Price will be used by the JV Group for its capital expenditure and
daily operations.

–6–
Conditions precedent

Completion of the Subscription Agreement is conditional upon:

(a) the completion of the S&P Agreement pursuant to which Texhong Winnitex shall
be organised to become the holding company of the Target Group;

(b) the parties have entered into the JV Term Sheet; and

(c) all representations and warranties remaining true, accurate and not misleading in all
material aspects upon Subscription Completion Date.

None of the above conditions may be waived by any party to the Subscription
Agreement.

If the conditions set out above are not fulfilled on or prior to the Long Stop Date, the
Subscription Agreement shall terminate and neither of the parties will have any claim
against the other for costs, damages, compensation or otherwise save for any antecedent
breach of the Subscription Agreement.

Subscription Completion

The Subscription Completion shall take place on the date on which all conditions set
out in the paragraph headed ‘‘Conditions precedent’’ above are fulfilled and shall take
place on the same date as the S&P Completion.

The Subscription Completion is inter-conditional with the S&P Completion.

Upon the Subscription Completion, Texhong Winnitex will cease to be a direct wholly-
owned subsidiary of the Company, but will remain as a subsidiary of the Company and
the financial information of Texhong Winnitex and its subsidiaries will be consolidated
to the Company’s consolidated financial statements.

Financial effects

As the Subscription Price was determined based on the acquisition cost of the Target
Group and net asset value of the Vietnam Business and Nicaragua Business, it is
expected that there shall be no material financial effects to the Group as a result of the
Subscription.

–7–
(3) THE JV TERM SHEET

Date

7 December 2018

Parties

(1) the Company

(2) Mr. Wai Chi Kwok, Jacob

(3) Mr. Wai Chi Wah, Nelson

(4) Texhong Winnitex

The purpose of the JV Term Sheet is to set out in broad terms the management structure
of the JV Group after the Subscription Completion, the grant of the Put Option and the
Call Option.

Scope of business

The JV Group will own and manage the business of the Target Group, the Vietnam
Business and the Nicaragua Business.

Board composition

The board of Texhong Winnitex shall comprise of five directors, among which the
Group shall be entitled to nominate four directors and the Subscribers shall be entitled
to nominate one director.

Mr. Wai Chi Kwok, Jacob shall be appointed as director and managing director of the
JV Group for an initial term of four years and renewable automatically for successive
terms of one year each upon expiry of the current term until terminated by not less than
three months’ notice in writing served by Mr. Wai Chi Kwok, Jacob to the JV Group.

Reserved matters

Matters that require unanimous decisions from the shareholders of Texhong Winnitex
shall include, among others, (i) material change to the constitution documents of
Texhong Winnitex; (ii) creation, allotment or issue of any shares, or securities
convertible into shares, of Texhong Winnitex or the grant or issue of any options,
warrants or other rights to acquire any shares or securities convertible into shares of
Texhong Winnitex; (iii) reorganisation of Texhong Winnitex; and (iv) voluntary
liquidation of Texhong Winnitex.

–8–
Pre-emptive rights

Each party shall have the right, but not obligation, in the event of Texhong Winnitex
proposes to offers shares in Texhong Winnitex to any third party, to purchase its pro
rata portion of such shares subject to customary exceptions. Any shares not subscribed
for by either party may be reallocated to the other party. The price and other terms for
the purchase of such shares shall be the same as Texhong Winnitex proposes in the
transaction with the third party.

Restriction on transfer of shares

Save for the exercise of Put Option in the event of the occurrence of event of default by
the Group, during the term of four years from the Subscription Completion Date, no
transfer of shares in Texhong Winnitex is allowed.

Put Option

Each of the Subscribers may request the Company to purchase his shares in Texhong
Winnitex (‘‘Put Option’’) at a consideration equal to the percentage of the shareholding
to be sold multiplied by the Benchmarked Price I or the Benchmarked Price II,
whichever is higher (the ‘‘Option Price’’). The Put Option is exercisable by the
Subscribers at any time after the occurrence of an event of default of the JV Term Sheet
or the JV Agreement on the part of the Company or at any time after the fourth
anniversary of the Subscription Completion.

Call Option

The Company shall have the right to request the Subscribers to sell all but not some of
their shareholding in Texhong Winnitex to the Company at the Option Price (‘‘Call
Option’’) (i) if Mr. Wai Chi Kwok, Jacob ceases to be a controlling shareholder of the
nominee of the Subscribers; or (ii) at any time after the fifth anniversary of the
Subscription Completion.

Binding effect

The JV Term Sheet is legally binding in nature.

The parties shall negotiate in good faith to conclude and execute definitive
documentation of the agreements reflected in the JV Term Sheet no later than 30 June
2019, with each party using all reasonable efforts to complete before that date, provided
that the failure to agree upon such documentation shall not void the JV Term Sheet,
which shall then be implemented by each party in good faith.

–9–
INFORMATION OF THE TARGET GROUP

Winnitex Holdings is a company incorporated in the BVI with limited liability and is
principally engaged in investment holdings.

Winnitex HK is incorporated in Hong Kong with limited liability and is principally engaged
in sales, marketing and development of cotton based woven fabrics in Hong Kong. Winnitex
HK is wholly owned by Winnitex Holdings.

Zhejiang Qing Mao is established in the PRC and is principally engaged in the
manufacturing of cotton and cotton blend yarns, greige, dyed and finished woven fabrics in
the PRC.

Based on the unaudited pro forma combined accounts of the Target Group and the unaudited
pro forma combined profit before and after tax for the year ended 31 December 2017 was
approximately HK$259.0 million and HK$213.0 million, respectively and the unaudited pro
forma combined profit before and after tax for the year ended 31 December 2016 was
approximately HK$307.9 million and HK$255.8 million, respectively.

The unaudited pro forma combined net asset value of the Target Group as at 31 December
2017 was approximately HK$1.88 billion, which shall be reduced after distribution of
dividends by the Target Group to the Vendors prior to the S&P Completion.

INFORMATION OF TEXHONG WINNITEX AND THE JV GROUP

Texhong Winnitex is a company incorporated in the BVI with limited liability and wholly
owned by the Company.

Texhong Winnitex is set up for the purpose of the Reorganisation and will be principally
engaged in investment holdings.

Based on the unaudited pro forma combined accounts of the JV Group and the unaudited pro
forma combined profit before and after tax for the year ended 31 December 2017 was
approximately HK$232.4 million and HK$186.4 million, respectively and the unaudited pro
forma combined profit before and after tax for the year ended 31 December 2016 was
approximately HK$299.0 million and HK$246.9 million, respectively.

The unaudited pro forma combined net asset value of the JV Group as at 31 December 2017
was approximately HK$1.88 billion.

– 10 –
REASONS FOR AND BENEFITS OF ENTERING INTO THE S&P AGREEMENT,
THE SUBSCRIPTION AGREEMENT AND THE JV TERM SHEET

The Group is principally engaged in the manufacturing and sales of yarns, grey fabrics,
garment fabrics as well as garments.

The Target Group is principally engaged in the manufacturing and sale of woven textile
fabrics and providing a vertically integrated service, from spinning, weaving, dyeing, to
finishing for its international clients. They have an experienced management team, a broad
customer base and sell directly to many of the largest international fashion and workwear
brands, and are well-known for their service, quality, reliability and innovation within the
textile industry. With the acquisition of the Target Group, the Board believes that the Group
will be able to increase its annual production capacity in dyed woven fabric by 90 million
yards. This combination will allow quality-driven flexibility to the fast-paced apparel and
technical workwear businesses and will create synergy benefits for the Group by leveraging
on the well-established customer base and brand reputation of the Target Group. The
Group’s capability to produce high quality dyed woven fabrics in the PRC, Vietnam and
Nicaragua and its profitability will be significantly enhanced.

The terms of the S&P Agreement, the Subscription Agreement and the JV Term Sheet were
determined after arm’s length negotiations between the parties thereto and the Directors
(including the independent non-executive Directors) are of the view that the terms of the
Agreement are fair and reasonable and in the interests of the Company and its shareholders
as a whole.

IMPLICATIONS UNDER THE LISTING RULES

As the applicable percentage ratios in respect of the transaction contemplated under the S&P
Agreement are more than 5% but all applicable percentage ratios are below 25%, the
entering into of the S&P Agreement constitutes a discloseable transaction of the Company
under Chapter 14 of the Listing Rules.

The Subscription constitutes a deemed disposal by the Company under Rule 14.29 of the
Listing Rules. As one or more of the applicable percentage ratios for the Subscription under
Rule 14.07 of the Listing Rules are more than 5% but all applicable percentage ratios are
below 25%, the Subscription by the Subscribers constitutes a discloseable transaction of the
Company under Chapter 14 of the Listing Rules.

Pursuant to Rule 14.76(1) of the Listing Rules, as the applicable percentage ratios in respect
of the grant of the Put Option are more than 5% but all applicable percentage ratios are
below 25%, the Put Option constitutes a discloseable transaction of the Company under
Chapter 14 of the Listing Rules.

– 11 –
DEFINITIONS

Unless otherwise specified, the following terms have the following meanings in this
announcement:

‘‘Adjusted NAV’’ total value of all assets of the Target Group less all
liabilities of the Target Group as shown on the combined
pro forma financial statements of the Target Group as at 30
September 2018

‘‘Benchmarked Price I’’ annualised average pro forma combined EBITDA (excluding
non-recurring items) of the JV Group for the 24 months
preceding the exercise of the Put Option multiplied by 5.0,
deducting all interest-bearing borrowings of the JV Group

‘‘Benchmarked Price II’’ if the pro forma combined EBITDA (excluding non-
recurring items) of the JV Group for the 12 months period
before the exercise of the Put Option is higher than the
agreed threshold, the ‘‘Benchmarked Price II’’ shall equal to
the pro forma combined net asset value of the JV Group as
at the end of the month preceding the exercise of the Put
Option deducted by the agreed premium of the acquisition
of the Target Group and then multiplied by 1.26; if the pro
forma combined EBITDA (excluding non-recurring items)
of the JV Group for the 12 months period up before the
exercise of the Put Option is lower than the agreed
threshold, the ‘‘Benchmarked Price II’’ shall equal to the
sum of (i) the pro forma combined net asset value of the
Target Group as at the end of the month preceding the
exercise of the Put Option deducted by the agreed premium
of the acquisition of the Target Group and the net asset
value of the Nicaragua Business and the Vietnam business
on Subscription Completion Accounts Date and then
multiplied by 1.26 and (ii) the net asset value of the
Nicaragua Business and the Vietnam Business on
Subscription Completion Account Date

‘‘Board’’ the board of Directors

‘‘BVI’’ British Virgin Islands

‘‘Call Option’’ the option granted by the Subscriber to the Company as

described under the paragraph headed ‘‘The JV Term Sheet’’

‘‘Company’’ Texhong Textile Group Limited, a company incorporated in

the Cayman Islands with limited liability and the issued
shares of which are listed on the Main Board of the Stock
Exchange

‘‘Director(s)’’ the director(s) of the Company

– 12 –
‘‘Group’’ the Company and its subsidiaries

‘‘Guarantors’’ six natural persons

‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC

‘‘JV Agreement’’ the definitive documentation pursuant to or contemplated

under the JV Term Sheet

‘‘JV Group’’ Texhong Winnitex and its subsidiaries after completion of

the Reorganisation

‘‘JV Term Sheet’’ a term sheet dated 7 December 2018 and entered into
between the Company, Mr. Wai Chi Kwok, Jacob, Mr. Wai
Chi Wah, Nelson and Texhong Winnitex regulating the joint
investment and management of Texhong Winnitex and the
rights and obligations for each parties

‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock
Exchange

‘‘Long Stop Date’’ 30 June 2019 (or such other date as the relevant parties may
agree in writing)

‘‘Merit Horizon’’ Merit Horizon International Limited 優景國際有限公司, a

company incorporated in the BVI which is an indirect
wholly owned subsidiary of the Company as at the date of
this announcement and will become a wholly owned
subsidiary of Texhong Winnitex after the completion of the
Reorganisation

‘‘Nicaragua Business’’ weaving and dyeing operations in Nicaragua owned and

controlled by Texhong Americas together with its
subsidiaries

‘‘PRC’’ the People’s Republic of China

‘‘Put Option’’ the option granted by the Company to the Subscribers as

described under the paragraph headed ‘‘The JV Term Sheet’’

‘‘Reorganisation’’ the reorganisation of companies pursuant to which Texhong

Winnitex shall become the holding company of the Target
Group, the Nicaragua Business and Vietnam Business

‘‘S&P Agreement’’ a sale and purchase agreement dated 7 December 2018 and
entered into between the Company as the purchaser, the
Guarantors and the Vendors as vendors in relation to the
sale and purchase of the entire issued share capital of
Winnitex Holdings and Zhejiang Qing Mao

– 13 –
‘‘S&P Completion’’ completion of the S&P Agreement

‘‘S&P Restricted Period’’ the period of three (3) years from the date of S&P
Completion

‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

‘‘Subscribers’’ Mr. Wai Chi Kwok, Jacob and Mr. Wai Chi Wah, Nelson

‘‘Subscription’’ the subscription of the Subscription Shares by the

Subscribers pursuant to the Subscription Agreement

‘‘Subscription Agreement’’ the subscription agreement dated 7 December 2018 and

entered into between Texhong Winnitex as the issuer, the
Company as guarantor and the Subscribers as the
subscribers in relation to the Subscription

‘‘Subscription Completion’’ completion of the Subscription Agreement

‘‘Subscription Completion the date on which the Subscription Completion takes place
Date’’

‘‘Subscription Completion (i) if the Reorganisation has been completed before the
Accounts Date’’ Subscription Completion Date; or (ii) if the Reorganisation
has not been completed as at the Subscription Completion
Date, the relevant Subsequent Payment Dates

‘‘Subscription Price’’ the consideration payable for the Subscription, which

formula is set out in the paragraph headed “Subscription
Price” in this announcement

‘‘Subscription Shares’’ new ordinary shares of US$1.00 each in the share capital of
Texhong Winnitex to be subscribed by the Subscribers
representing 20% of the enlarged issued share capital of
Texhong Winnitex upon Subscription Completion

‘‘Subsequent Payment Dates’’ the dates of payment of the ‘‘Second Tranche’’ and ‘‘Third
Tranche’’ as set out in the table under the paragraph headed
‘‘Subscription Price’’ in this announcement

‘‘Target Group’’ collectively, Winnitex Holdings, Winnitex HK and Zhejiang

Qing Mao

‘‘Texhong Americas’’ Texhong Winnitex Americas Limited 天虹慶業美洲有限公

司, a company incorporated in the BVI which is a wholly
owned subsidiary of the Company as at the date of this
announcement and will become a wholly owned subsidiary
of Texhong Winnitex after the completion of the
Reorganisation

– 14 –
‘‘Texhong Winnitex’’ Texhong Winnitex Holdings Limited 天虹慶業控股有限公
司, a company incorporated in the BVI which is a wholly
owned subsidiary of the Company as at the date of this
announcement

‘‘Winnitex HK’’ Winnitex Limited, a company incorporated in Hong Kong

which is wholly owned by Winnitex Holdings

‘‘Winnitex Holdings’’ Winnitex Holdings Limited, a company incorporated in the

BVI

‘‘Vendors’’ collectively (i) Winnitex Group Limited, a company

incorporated in the BVI and the sole shareholder of
Winnitex Holdings upon completion of the reorganisation
under the S&P Agreement; and (ii) Winnitex China
Holdings Limited, a company incorporated in Hong Kong
and the sole shareholder of Zhejiang Qing Mao

‘‘Vietnam Business’’ weaving and dyeing operations in Vietnam owned and

controlled by Merit Horizon together with its subsidiaries

‘‘Zhejiang Qing Mao’’ 浙江慶茂紡織印染有限公司 (Zhejiang Qing Mao Weaving,

Dyeing, Printing Co., Ltd.), a company established in the
PRC which is wholly owned by Winnitex China Holdings
Limited (being one of the Vendors) as at the date of this
announcement

‘‘%’’ per cent.

By Order of the Board

Texhong Textile Group Limited
Hong Tianzhu
Chairman

Hong Kong, 10 December 2018

As at the date of this announcement, the Board comprises the following directors:

Executive Directors: Mr. Hong Tianzhu

Mr. Zhu Yongxiang
Mr. Tang Daoping
Mr. Hui Tsz Wai
Mr. Ji Zhongliang

Independent non-executive Directors: Prof. Cheng Longdi

Prof. Tao Xiaoming
Mr. Ting Leung Huel, Stephen

– 15 –