<China Grand Pharm Newsletter - 2016 Issue 7​>
Controlling Shareholder of China Grand Pharmaceutical and Healthcare Holdings Limited Increased Shareholding to 64.58%

Date: 13 July 2016
Location: Hong Kong

On 13 July 2016, China Grand Pharmaceutical and Healthcare Holdings Limited (the Company) entered into the Subscription Agreement with Outwit Investments Limited, controlling shareholder of the Company and Emporium Energy Limited, an indirect non-wholly owned subsidiary of China Grand Enterprises Incorporation. The aggregate gross proceeds from the Subscription are expected to be approximately HK$151.2 million. The Subscription Shares in aggregate represent (i) approximately 5.50% of the existing issued share capital of the Company; and (ii) approximately 5.22% of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares.

Outwit and Emporium had conditionally agreed to subscribe 83,056,478 and 24,916,943 Subscription Shares respectively at the Subscription Price of HK$1.40 per Subscription Share for a cash consideration of approximately HK$ 116,279,000 and HK$34,884,000.

The Board of Directors has approved the capital raising plan, required the passing of resolutions by the Independent Shareholders to approve the plan. The Board of Directors believes that the current capital market downturn and high volatility situation, the action of increment of shareholding explained the controlling shareholder has have great confidence in the prospective of the Company, the capital fund will support the M&A activities of the Company, broaden product variety, enhance the profitability of the Company, also reducing the debt ratio, financial costs; it is an important event with positive impact on the Company.