01918 融创中国展示文件：(b) 独立财务顾问函件

香港中环干诺道中64-66号厂商会大厦15楼A室

Unit A, 15th flor, CMA Building, 64-66 Conaught Road Central, Hong Kong

T: (852) 2185 7810 F: (852) 3471 7628 W: w.ignitecapitalap.com.hk

22 August 2025

To: The Independent Board Comite and the Independent Shareholders of Sunac China

Holdings Limited

Dear Sir or Madam,

CONECTED TRANSACTION – ISUE OF MANDATORY

CONVERTIBLE BONDS TO SUBSTANTIAL SHAREHOLDER

INTRODUCTION

We, Ignite Capital (Asia Pacific) Limited (“Ignite Capital”), refer to our apointment

by the Company t o advise the Independent Board Comite and the Independent

Shareholders in respect of the Conected MCB Isue and the transactions contemplated

thereunder, details of which are set out in the leter from the Board (the “Leter from the

Board”) contained in the circular of the Company dated 22 August 2025 (the “Circular”), of

which this leter forms part. Capitalised terms used in this leter shal have the same meanings

as those defined in the Circular unles the context requires otherwise.

Reference is made to the anouncement of the Company dated 17 April 2025 in relation

to the Restructuring, the Company proposed to implement the Restructuring through the

Scheme. Reference is also made to the Anouncement in relation to, among others, the

Conected MCB Isue.

The scope of the Restructuring includes ofshore debts isued or guaranted by the

Company, with estimated debt claims (including principal and acrued and unpaid interest,

but excluding default interest) (i,e. the Scheme Creditors’ Claims) of US$9,552,284,577.95 in

agregate as of 30 June 2025, subject to review and determination by the Scheme

administrator. The Restructuring wil involve release of the Company’s indebtednes as wel

as certain obligations of other entities in the Group.

In consideration for the cancelation of the Existing Debt and the release of the relevant

claims in conection with the Existing Debt, subject to the arangement set out in the

paragraph headed “The Shareholding Structure Stability Arangement” below, two series of

MCBs wil be distributed to the Scheme Creditors as Restructuring Consideration.

MCB1andMCB2togethershalhaveanagregateprincipalamountequaltothetotal

amountofalSchemeCreditors’Claims.SubjectothetermsoftheRestructuringandtothe

extentpermitedbyaplicablelawsandregulations,SchemeCreditorsmayelectforMCB1,

MCB2,oracombinationofMCB1andMCB2,subjectotheElectionandAlocation

Mechanismasetoutunderthesectionheaded“2.BACKGROUNDANDKEYFEATURES

OFTHERESTRUCTURING”intheLeterfromtheBoard.

THECONECTEDMCBISUE

(a)IsueofMCBstoSunacInternationalasaSchemeCreditor

AsatheLatestPracticableDate,SunacInternational,asubstantialshareholderofthe

Companywhicholdsaproximately23.31%ofthetotalisuedsharecapitaloftheCompany,

wastheholderoftheSunacInternationalMCB,beingoneoftheExistingDebt.Therefore,

similartotherholdersoftheExistingDebt,subjectotheElectionandAlocation

Mechanism,theSunacInternationalMCBheldbySunacInternationalwilbexchangedinto

MCBsintheRestructuring.AsatheLatestPracticableDate,theagregateprincipalamount

oftheSunacInternationalMCBoutstandingwasUS$15,812,060.00.Itisestimatedthat

SunacInternational,asaSchemeCreditor,maybeisuedMCBsintheprincipalamountofup

toUS$15,812,060.00.

SunacInternationalwilnotbereceivinganyConsentFesundertheScheme.

(b)IsueofMCBstoMr.Sunorhisdesignatedperson(s)undertheShareholding

StructureStabilityArangement

23%oftheMCBs(comprisingtheMCB1andtheMCB2)atributabletotheScheme

CreditorsasRestructuringConsiderationwilbeusedfortheShareholdingStructureStability

Arangement.

To1)maintainastableshareholdingstructure,2)ensurethecontinuedcontributionof

Mr.SuntotheGroup’songoinghomedeliveryprogram,debtriskresolutionandlong-term

businesrecovery,and3)strengthenstakeholderconfidenceandbeterfacilitateresource

integration,conditionalrestrictedshares(the“RestrictedShares”)areproposedtobe

alocatedtotheSubstantialShareholderorhisdesignatedperson(s)aspartofthe

Restructuring.ThiswouldenableMr.Sunand/orhisdesignatedpersonstoretainacertain

shareholdinglevel.Specificaly,foreveryUS$100inprincipalamountofMCBsatributable

totheSchemeCreditors(otherthanthoseatributabletoSunacInternational),US$23outof

thoseMCBs(the“RelevantNewMCBs”)wilinsteadbeisuedtoMr.Sunorhisdesignated

person(s)(the“Designe(s)”).

OnthebasisoftheMaximumSchemeCreditors’Claims,itisestimatedthatMr.Sun

and/ortheDesigne(s)maybeisuedaditionalMCBsinprincipalamountofupto

US$2,215,863,226.20asaresultoftheShareholdingStructureStabilityArangement.

TotalamountofMCBstobeisuedtoSunacInternationaland/orMr.Sunand/orhis

designatedperson(s)

Basedontheabovetwoarangements(namely,isueofMCBstoSunac

InternationalasaSchemeCreditorandisueofMCBstoMr.Sunorhisdesignated

person(s)undertheShareholdingStructureStabilityArangement),subjectothe

ocurenceoftheRestructuringEfectiveDate,basedontheMaximumScheme

Creditors’Claims,itisestimatedthatSunacInternationaland/orMr.Sunand/orhis

designatedperson(s)wilinagregatebeisuedMCBsinprincipalamountofupto

US$2,231,675,286.20intheRestructuring,comprising(1)theMCBsinprincipal

amountofuptoUS$15,812,060.00tobeisuedtoSunacInternationalasaScheme

Creditorand(2)theMCBsinprincipalamountofuptoUS$2,215,863,226.20tobe

isuedtoMr.Sunorhisdesignatedperson(s)undertheShareholdingStructureStability

Arangement.

LISTINGRULESIMPLICATIONS

SunacInternationalisasubstantialshareholderoftheCompanywhicholds

aproximately23.31%ofthetotalisuedsharecapitaloftheCompanyasatheLatest

PracticableDate.SunacInternationaliscontroledbyfamilytrustsofMr.Sun,thechairman

oftheBoardandanexecutiveDirector.EachofSunacInternationalandMr.Sunisa

conectedpersonoftheCompanyunderChapter14AoftheListingRules.

Acordingly,theConectedMCBIsue,comprising(1)theisueofMCBstoSunac

InternationalasaSchemeCreditorand(2)theisueofMCBstoMr.Sunorhisdesignated

person(s)undertheShareholdingStructureStabilityArangement,constitutesaconected

transactionfortheCompanyandisubjectothereporting,anouncement,circularand

IndependentShareholders’aprovalrequirementsunderChapter14AoftheListingRules.

TheConectedMCBIsueandthetransactionscontemplatedthereunderaresubjectothe

pasingofnecesaryresolutionbytheIndependentShareholdersatheEGM.

SavethatSunacInternational,Mr.Sun,TianjinBiaodiandMr.SunKevinZheyi(theson

ofMr.Sun),holdinginagregateaproximately23.91%ofthetotalnumberofisuedShares

asatheLatestPracticableDate,andbeinginterestedinthetransactionscontemplatedunder

theConectedMCBIsue,shalabstainfromvotingfortheresolutiontoaprovethe

ConectedMCBIsueandthetransactionscontemplatedthereunderatheEGM,tothebest

oftheDirectors’knowledge,informationandbeliefhavingmadealreasonablenquiries,no

ShareholderwasrequiredtoabstainfromvotingfortheresolutionstoaprovetheMCBIsue

(includingtheConectedMCBIsue)andthetransactionscontemplatedthereunderathe

EGM.

THEINDEPENDENTBOARDCOMITE

TheIndependentBoardComitecomprisingMr.PONChiuKwok,Mr.ZHUJia,Mr.

MALishanandMr.YUANZhigang,beingaltheindependentnon-executiveDirectors,was

establishedtoconsiderandtoadvisetheIndependentShareholderson:(i)whetherthe

ConectedMCBIsueandthetransactionscontemplatedthereunderareconductedinthe

ordinaryandusualcourseofbusinesoftheGroupandintheinterestsoftheCompanyandthe

Shareholdersasawhole;(i)whethertermsoftheConectedMCBIsueandthetransactions

contemplatedthereunderareonormalcomercialtermsandfairandreasonablesofarasthe

IndependentShareholdersareconcerned;and(i)howtheIndependentShareholdershould

voteontherelevantresolutionatheEGM.OurapointmentastheIndependentFinancial

AdvisertotheIndependentBoardComiteandtheIndependentShareholdersinthesame

respecthasbenaprovedbytheIndependentBoardComitepursuantotheRule13.84of

theListingRules.

OURINDEPENDENCE

AsatheLatestPracticableDate,wedidnothaveanyrelationshipwith,orinterestin,

theGroup,Mr.Sun,SunacInternationalorotherpartiesthatcouldreasonablyberegardedas

relevantourindependence.Duringthetwoyearsimediatelypriortothisleter,Ignite

Capitalhasnot:(i)actedinthecapacityasafinancialadviserorasanindependentfinancial

advisertotheCompany;(i)providedanyservicestotheCompany;or(i)hadany

relationshipwiththeCompany.Apartfromnormalindependentfinancialadvisoryfespaidor

payable(asthecasemaybe)tousinconectionwiththisapointment,noarangementsexist

wherebywehadreceivedorwilreceiveanyfesorbenefitsfromtheGroup,Mr.Sun,Sunac

Internationaloranyotherpartiesthatcouldreasonablyberegardedasrelevantour

independence.Acordingly,weconsiderthatweareindependentpursuantoRule13.84ofthe

ListingRules.

BASISOFOUROPINION

InformulatingouradviceandrecomendationtotheIndependentBoardComiteand

theIndependentShareholders,wehavereviewed,amongstotherthings:

(i)theCompany’sanualreportfortheyearended31December(“FY”)2024(the

“2024AnualReport”);

(i)anouncementoftheCompanydated17April2025inrelationtotheRestructuring;

(i)theAnouncement;and

(iv)otherinformationasetoutintheCircular.

Wehavereliedonthetruth,acuracyandcompletenesofthestatements,information,

opinionsandrepresentationscontainedoreferedtointheCircularandtheinformationand

representationsmadetousbytheCompany,theDirectorsandthemanagementoftheGroup

(colectively,the“Management”).Wehaveasumedthatalinformationandrepresentations

containedoreferedtointheCircularandprovidedtousbytheManagement,forwhichthey

aresolelyandwholyresponsible,aretrue,acurateandcompleteinalrespectsandnot

misleadingordeceptiveathetimewhentheywereprovidedormadeandwilcontinuetobe

souptotheLatestPracticableDate.Shareholderswilbenotifiedofmaterialchangesason

asposible,ifany,totheinformationandrepresentationsprovidedandmadetousafterthe

LatestPracticableDateanduptoandincludingthedateoftheEGM.

Wehavealsoasumedthatalstatementsofbelief,opinion,expectationandintention

madebytheManagementintheCircularwerereasonablymadeafterduenquiriesandcareful

considerationandtherearenotherfactsnotcontainedintheCircular,theomisionofwhich

makeanysuchstatementcontainedintheCircularmisleading.Wehavenoreasontosuspect

thatanyrelevantinformationhasbenwitheld,ortodoubthetruth,acuracyand

completenesoftheinformationandfactscontainedintheCircular,orthereasonablenesof

theopinionsexpresedbytheManagement,whichavebenprovidedtous.

Weconsiderthatwehavebenprovidedwithsuficientinformationtoreachaninformed

viewandtoprovideareasonablebasisforouropinion.However,wehavenotcariedoutany

independentverificationoftheinformationprovidedbytheManagement,norhavewe

conductedanyindependentinvestigationintothebusines,financialconditionsandafairsof

theGrouporitsfutureprospects.

TheDirectorsjointlyandseveralyaceptfulresponsibilityfortheacuracyofthe

informationdisclosedandconfirm,havingmadealreasonablenquiriesthatothebestof

theirknowledgeandbelief,therearenotherfactsnotcontainedinthisleter,theomisionof

whichwouldmakeanystatementhereinmisleading.

ThisleterisisuedtotheIndependentBoardComiteandtheIndependent

ShareholdersolelyinconectionfortheirconsiderationoftheConectedMCBIsueandthe

transactionscontemplatedthereunder,andexceptforitsinclusionintheCircular,isnotobe

quotedoreferedto,inwholeorinpart,norshalthisleterbeusedforanyotherpurposes

withoutourpriorwritenconsent.

PRINCIPALFACTORSANDREASONSCONSIDERED

InarivingatouropinioninrespectoftheConectedMCBIsueandthetransactions

contemplatedthereunder,wehavetakenintoconsiderationthefolowingprincipalfactorsand

reasons:

1.InformationoftheParties

1.1TheGroup

Businesprofile

TheCompanyisacompanyincorporatedintheCaymanIslandswithlimited

liability,theSharesofwhicharelistedonthemainboardoftheStockExchange.

TheGroupisprincipalyengagedinrealestatedevelopment,property

management,ice&snowoperationmanagement,culturaltourism,cultureand

otherbusinesegments.

Financialinformation

ThefolowingisasumaryofthefinancialresultsoftheGroupforthe

FY2023andFY2024,asextractedfromthe2024AnualReport.

Table1:HighlightsofthefinancialresultsoftheGroup

FY2024FY2023

AuditedAudited

(RMB’000)(RMB’000)

Revenue74,019,193154,230,892

–Revenuefromsalesofproperties61,234,808140,795,561

–Culturaltourismcityconstruction

andOperationincome5,208,1045,915,164

–Propertymanagementincome6,879,0196,600,521

–Revenuefromotherbusines697,262919,646

Grosprofit/los2,892,108(2,502,743)

Losatributabletownersof

theCompany(25,695,200)(7,968,963)

Source:the2024AnualReport

TotalrevenueoftheGroupforFY2024amountedtoaproximately

RMB74.02bilion,representingadecreaseofaproximately52.0%ascompared

withthetotalrevenueofaproximatelyRMB154.23bilionforFY2023.The

decreaseinrevenueoftheGroupwasmainlyduetothedeclineinrevenuefrom

salesofproperties.RevenuefromsalesofpropertiesinFY2024decreasedby

aproximately56.5%ascomparedwiththatforFY2023.Astatedinthe2024

AnualReport,duetothecontinuedownturnintherealestatemarket,the

contractioninewsalesandtheliquiditypresurefacedbytheGroup,property

deliveryareaoftheGroupforFY2024decreasedcomparedtoFY2023witha

corespondingreductioninpropertysalesrevenue.

TheGroup’sgrosprofitforFY2024wasaproximatelyRMB2.89bilion,

representinganincreaseofaproximatelyRMB5.39bilionascomparedwiththe

groslosofaproximatelyRMB2.50bilionforFY2023.Theincreaseingros

profitwasmainlyduetotheimpactofthehighproportionofhighmarginprojects

cariedforwardfromtheGroup’spropertysalesrevenueinFY2024andthe

reductionintheprovisionforimpairmentofpropertiesrecognisedbytheGroup

duringFY2024comparedtoFY2023.

LosoftheGroupatributabletownersoftheCompanyforFY2024

amountedaproximatelyRMB25.70bilion,representinganincreaseof

aproximately222.4%fromaproximatelyRMB7.97bilioninFY2023.Such

increaseinthelosoftheGroupatributabletownersoftheCompanyinFY2024

wasatributabletovariousfactors,including,amongothers,(i)decreaseinother

incomeandgainsoftheGroupmainlyduetothehigherestructuringincomefrom

ofshoredebtrecognisedinFY2023;(i)increaseinfinancexpensesoftheGroup

mainlyduetothedecreaseinproportionofcapitalisedinterestsintotalinterest

expensesinlinewiththedeveloprocesoftheGroup’spropertydevelopment

projectsascomparedtothatofFY2023;and(i)shareofpost-taxlosesof

asociatesandjointventuresoftheGroupmainlyduetothedecreaseinrevenue

andoperatingprofitoftheGroup’sjointventuresandasociatesandincreasing

provisionofimpairmentforinvestmentacountedforusingthequitymethod

recognisedbytheGroupduringFY2024ascomparedtoFY2023.

Wealsonotedfromthe2024AnualReporthatheGrouprecorded

consecutivelosesatributabletotheownersoftheCompanyforFY2021,FY2022,

FY2023andFY2024.

ThefolowingisasumaryofthefinancialpositionsoftheGroupasat31

December2024asextractedfromthe2024AnualReport:

Table2:HighlightsofthefinancialpositionsoftheGroup

FY2024FY2023

AuditedAudited

(RMB’000)(RMB’000)

Non-curentasets193,416,085219,350,288

Curentasets689,467,066758,503,915

Non-curentliabilities84,749,731114,822,303

Curentliabilities742,987,052779,246,035

Equityatributabletownersof

theCompany40,521,10862,428,917

Source:the2024AnualReport

Asat31December2024,totalasetsandliabilitiesoftheGroupwere

aproximatelyRMB882.88bilionandRMB827.74bilionrespectively,as

comparedtototalasetsandliabilitiesofaproximatelyRMB977.85bilionand

RMB894.07bilionasat31December2023respectively,registeringadecreaseof

aproximately9.7%and7.4%respectively.TheGrouprecordedanetcurent

liabilitypositionofaproximatelyRMB53.52bilionasat31December2024.

WiththelosoftheGroupatributabletownersoftheCompanyforFY2024of

aproximatelyRMB25.70bilion,thequityatributabletownersoftheCompany

decreasedfromaproximatelyRMB62.43bilionasat31December2023to

aproximatelyRMB40.52bilionasat31December2024,representingadecrease

ofaproximately35.1%.

GoingconcernisueandthenedfortheRestructuring

Itwasnotedfromthe2024AnualReporthat,whiletheBoardhasprepared

theconsolidatedfinancialstatementsoftheGroupasat31December2024ona

goingconcernbasis,theCompany’sauditor,BDOLimited(“BDO”),hasgivena

disclaimerofopinion(the“DisclaimerofOpinion”)ontheconsolidatedfinancial

statementsoftheGroupforFY2024.ThebasisoftheDisclaimerofOpinion

indicatedthexistenceofmaterialuncertaintieswhichmaycastsignificantdoubt

ontheGroup’sabilitytocontinueasagoingconcern,detailsofwhichare

sumarisedasfolows:

(i)theGroupincuredanetlosofaproximatelyRMB27.40bilionforFY2024

and,asat31December2024,theGrouphadnetcurentliabilitiesof

aproximatelyRMB53.52bilion;

(i)theGroup’scurentandnon-curentborowingsamountedtoaproximately

RMB186.09bilionandRMB73.58bilionasat31December2024

respectively,whiletheGrouphadtotalcash(includingcashandcash

equivalentsandrestrictedcash)amountingtoaproximatelyRMB19.75

bilion;

(i)asat31December2024,theGrouphadnotrepaidborowingsinprincipal

amountofaproximatelyRMB105.80bilioninagregateacordingtotheir

scheduledrepaymentdates,andasaresult,borowingsinprincipalamount

totalingofaproximatelyRMB64.57bilionmightbedemandedforearly

repayment;

(iv)uptothedateofthe2024AnualReport,theGrouphadnotrepaidborowings

inprincipalamountofaproximatelyRMB109.35bilioninagregate

acordingtotheirscheduledrepaymentdatesandasaresult,borowingsin

principalamountotalingofaproximatelyRMB56.44bilionmightbe

demandedforearlyrepayment;and

(v)theGroupwasinvolvedinvariouslitigationandarbitrationcasesinrelation

tothesetlementofunpaidborowings,outstandingconstructionandaily

operationpayables,delayedeliveryofprojectsandothermatersofthe

Group.

WenotethatitisnothefirstyearthatBDOisuedadisclaimerofopinionon

theconsolidatedfinancialstatementsoftheGroup.Infact,BDOisuedisclaimer

ofopinionontheGroup’sconsolidatedfinancialstatementsforeachofFY2023,

FY2022andFY2021undersimilarcircumstancesastheDisclaimerofOpinion.

Notablyon10January2025,theCompanyreceivedawinding-upetition(the

“Petition”)filedbyChinaCinda(HK)AsetManagementCo.,Limited(the

“Petitioner”)atheHighCourtofHongKong(the“HighCourt”)inrelationtothe

non-repaymentoftheloantothePetitioneraslenderbyShiningDelightInvestment

Limited(anindirectwholyownedsubsidiaryoftheCompany)asborowerandthe

Companyasguarantor,intheagregateprincipalamountofUS$30,000,000and

acruedinterests.On20August2025,theHighCourthasvacatedthehearingofthe

Petitionscheduledon25August2025andhasadjournedthehearingforthe

Petitionto5January2026.

Basedontheabove,wenotethatheCompanyisfacingpresureonits

workingcapitalandliquiditypositions.Theabovechalengingconditionsmaycast

doubtontheGroup’sabilitytocontinueasagoingconcern.

1.2SunacInternationalandMr.Sun

SunacInternationalisacompanyincorporatedintheBritishVirginIslands,which

iscontroledbyfamilytrustsofMr.Sun,thechairmanoftheBoardandanexecutive

Director.SunacInternationalisprincipalyengagedininvestmentholding.

2.ReasonsforandbenefitsoftheConectedMCBIsue

TheCompanyisacompanyincorporatedintheCaymanIslandswithlimitedliability,

whichislistedonthemainboardoftheStockExchange.Withthebrandphilosophyof

“pasionforperfection”,theGroupiscomitedtoprovidingwonderfulivingenvironment

andservicesforChinesefamiliesthroughigh-qualityproductsandservicesandintegration

ofhigh-qualityresources.Withafocusonitscorebusinesofrealestate,theGroup

implementsitstrategiclayoutinrealestatedevelopment,propertymanagement,ice&snow

operationmanagement,culturaltourism,cultureandotherbusinesegments.Aftermorethan

20yearsofdevelopment,theGrouphasbecomealeadingenterpriseinChina’srealestate

industry,aleadingice&snowindustryoperatorandaleadingculturaltourismindustry

operatorandpropertyownerinChina,withnationwideleadingcapabilitiesincomprehensive

urbandevelopmentandintegratedindustrialoperation.

OverviewoftheGroup’sfinancialsituation

Asat31December2024,theGrouphadborowingsofaproximatelyRMB259.67

bilion(ofwhichaproximatelyRMB73.58bilionwereclasifiedasnon-curent

borowingsandaproximatelyRMB186.09bilionwereclasifiedascurent

borowings).TheborowingsoftheGroupmainlycomprisedbankandotherinstitution

borowings,seniornotes,corporatebonds,privatedomesticorporatebondsand

convertiblebonds.FurtherdetailsoftheindebtednesituationoftheGroupasat31

December2024aresetoutinthe2024AnualReport.

Asat31December2024,theGrouphadnotrepaidborowingsinprincipalamount

ofaproximatelyRMB105.80bilioninagregateacordingtotheirscheduled

repaymentdates,andasaresult,borowingsinprincipalamountotalingof

aproximatelyRMB64.57bilionmightbedemandedforearlyrepayment(the

“OverdueandEarlyRepaymentBorowings”).

ThetablebelowsetsoutheborowingsoftheCompanyasat31December2024

Asat

31December

RMB(bilion)

Non-curentborowings73.58

Curentborowings186.09

Totalborowings259.67

TheRestructuring

InlightoftheimpactofthePetition,andthefacthatcurentindustryconditions

havesignificantlyfalenshortofexpectationsathetimewhenthepreviousofshore

debtrestructuringplanwasformulated,theCompany,overthepastfewmonths,hasben

activelyworkingwithitsfinancialadviser,HoulihanLokey(China)Limited,andlegal

adviser,SidleyAustin,toasesitscurentfinancialandoperationalconditions,andhas

maintainedconstructivedialoguewithofshorecreditors,withaviewtoformulatinga

viableholisticofshoredebtsolutiontocompletelyadrestheofshoredebtrisks,

establishingasustainablecapitalstructureandstableoperatingenvironmentosuport

itslong-termbusinesrecovery.On17April2025,theCompanyreachedagrementwith

theInitialConsentingCreditorsonthetermsoftheRestructuring.

TheRestructuringaimstoprovideafairandequitablesolutionthatmaximizes

recoveryforcreditors,whilepreservingtheGroup’sabilitytoperateasagoingconcern

andcreatingawin-winoutcomeforalstakeholders.Specificaly,theRestructuringwil

(a)provideSchemeCreditorswiththeoportunitytoconvertheirdebtintoequity,

alowingthemtobenefitfromnear-termliquidityandpotentialequityupside;(b)

completelyadrestheGroup’sofshoredebtrisksandestablishasustainablecapital

structure(the“KeyRestructuringObjectives”).Asmentionedabove,theRestructuring

sekstoadrestheExistingDebt.SavefordebtsinrespectofwhichtheCompany

reachedortheCompanyisconfidenthatitwilreachbilateralagrementswiththe

relevantcreditors,theRestructuringwiladresalexistingofshoredebtsofthe

Company.

ThroughthepaymentoftheConsentFesbytheisueoftheMCB1,lescashflow

presurewilbecreatedontheGroupwhilemoreSchemeCreditorscanbeincentivized

tosuportheScheme.AlthoughtherelativeshareholdingintheCompanyofthe

existingShareholderswouldbedilutedasaresultoftheconversionoftheMCBs,the

BoardisoftheviewthatitwouldbeinthebestinterestoftheCompanyandthe

ShareholdersasawholeiftheliquidityoftheGroupwouldbesignificantlyimprovedas

aresultofthecompletionoftheRestructuring.

TheRestructuringwilbeimplementedthroughtheScheme.Upontheocurence

oftheRestructuringEfectiveDate,altheExistingDebtclaimsoftheSchemeCreditors

wilbedischargedandextinguishedandtheSchemeCreditorswilnotbealowedto

makeanyclaimagainstheCompanyinrespectoftheirExistingDebt.

NonetprocedswilbereceivedbytheGroupfromtheMCBIsue.Alproceds

fromtheMCBIsuewilbeapliedtowardsthesatisfactionofpartoftheRestructuring

Consideration,therebyreducingtheoveraldebtsizeandebtpresureoftheGroup,

enhancingitsnetasetvalueandsignificantlyimprovingthefinancialposition.The

exchangeoftherelevantdebtsoftheGroupintoMCBswilgreatlyimprovetheliquidity

oftheCompany.TheMCBIsuewouldalsoincreasethecapitalbasethroughtheisueof

SharesandhelptheCompanyachieveasustainablecapitalstructurewithsubstantialy

reducedofshoredebtsrisks.Inadition,theisueofMCBstotheSubstantial

Shareholderorhisdesignatedperson(s)undertheShareholdingStructureStability

ArangementwouldasistheCompanyinmaintainingastableshareholdingstructure,

ensurethecontinuedcontributionofMr.SuntotheGroup’songoinghomedelivery

program,debtriskresolutionandlong-termbusinesrecoveryandstrengthen

stakeholderconfidenceandbeterfacilitateresourceintegration.

InrelationtotheDisclaimerofOpinion,itisnotedfromtheindependentauditor’s

reportunderthe2024AnualReporthatheconsolidatedfinancialstatementshave

benpreparedonagoingconcernbasisastheCompanyhasbenundertakinganumber

ofplansandmeasurestoimprovetheGroup’sliquidityandfinancialposition,andhas

developedebtsolutions.TheGroup’sabilitytocontinueasagoingconcernlargely

hingesonwhether(a)itcansucesfulycompletetheRestructuring,ofwhichthe

ConectedMCBIsueandtheShareholdingStructureStabilityArangementformpart;

and(b)itcansucesfulynegotiatewiththeremaininglendersoftheGrouponthe

extensionofdeferaloftherepaymentoftheGroup’sborowings.

Inviewoftheabovefactors,inparticular(i)theconsecutivelosesoftheGroup

atributabletotheownersoftheCompanyforFY2021,FY2022,FY2023andFY2024;

(i)thenetcurentliabilitypositionoftheGroupasat31December2024of

aproximatelyRMB53.52bilion;(i)thecurentborowingsoftheGroupasat31

December2024ofaproximatelyRMB186.09bilionareduewithinoneyear;(i)the

substantialamountoftheOverdueandEarlyRepaymentBorowings,withthepresing

nedtomoveforwardtoachievetheKeyRestructuringObjectives;(iv)acordingtothe

2024AnualReporthat,theBoardhaspreparedtheconsolidatedfinancialstatementsof

theGroupasat31December2024onagoingconcernbasisandBDOhasgiven

DisclaimerofOpinionontheconsolidatedfinancialstatementsoftheGroupfor

FY2024;(v)togetherwiththePetition,theCompanyisfacingpresureonitsworking

capitalandliquiditypositions;and(vi)theRestructuringiscrucialfortheGroupto

achieveasustainablecapitalstructurewithsubstantialyreducedofshoredebtsand

insolvencyrisks,stableshareholdingstructure,stableworkforce,andstableoperating

environmentosuportitslong-termbusinesrecovery,wearethereforeoftheviewthat

theConectedMCBIsueandthetransactionscontemplatedthereunderaspartofthe

Restructuring,thoughnotconductedintheordinaryandusualcourseofbusinesof

Groupbuthasarisenoutofthenedtorestorethenormalcourseofbusinesofthe

Group,areintheinterestsoftheCompanyandtheShareholdersasawhole.

3.PrincipaltermsoftheMCBs

SubjectothetermsoftheRestructuring,twoseriesofMCBswilbedistributedtothe

SchemeCreditors,namelyMCB1andMCB2.Setoutbelowaretheprincipaltermsofthe

MCBsasextractedfromtheLeterfromtheBoardunderthesectionheaded“3.ISUEOF

MCBSUNDERSPECIFICMANDATE”:

Isuer:TheCompany

Principalamount:UptoUS$9,710,670,612.75(beingthesumof100%ofthe

MaximumSchemeCreditors’ClaimsandtheEarlyConsent

FeandtheBaseConsentFe)inprincipalamountofMCB

1;anduptoUS$2,412,500,000(being25%ofthe

MaximumSchemeCreditors’Claims)inprincipalamount

ofMCB2.

(a)AsRestructuringConsiderationtoScheme

Creditors

InrespectofMCB1,nolesthan75%oftheScheme

Creditors’Claims.

InrespectofMCB2,nomorethan25%oftheScheme

Creditors’Claims.

AsumingthatnoneoftheSchemeCreditorswilelect

forMCB2,altheSchemeCreditorswilreceive

MCB1bydefault.Inthiscase,theprincipalamount

oftheMCB1tobeisuedwouldbeupto

US$9,650,000,000,representing100%ofthe

MaximumSchemeCreditors’Claims,andnoMCB2

wilbeisued.

AsumingthatSchemeCreditors’electionsforMCB

2arenotlesthantheCap,MCB2wilbeisuedon

theRestructuringEfectiveDateinanagregate

principalamountequaltotheCap.Inthiscase,the

principalamountoftheMCB1tobeisuedwouldbe

uptoaproximatelyUS$7,237,500,000.00,

representing75%oftheMaximumSchemeCreditors’

Claims,andtheprincipalamountoftheMCB2tobe

isuedwouldbeuptoaproximately

US$2,412,500,000,representing25%ofthe

MaximumSchemeCreditors’Claims.

(b)AsConsentFe(MCB1only)

TheEarlyConsentFeandtheBaseConsentFeshal

bepayableintheformoftheMCB1atfacevalueon

orpriortotheRestructuringEfectiveDate,provided

thatherelevantermsoftheRSAarecompliedwith.

SchemeCreditorsholdingExistingDebtinprincipal

amountofUS$5,579,064,062.86haveacededtothe

RSAonorbeforetheEarlyConsentFeDeadline.

AsumingthatsuchConsentingCreditorswilhave

compliedwiththerelevantermsoftheRSAandwil

receivetheEarlyConsentFeinanamountequalto

1.0%oftheagregateprincipalamountoftheEligible

RestrictedDebtheldbysuchConsentingCreditoras

oftheEarlyConsentFeDeadline,EarlyConsent

Fe,beingMCB1inprincipalamountof

US$55,790,640.63,wilbeisued.

SchemeCreditorsholdingExistingDebtinaditional

principalamountofUS$975,994,424.32haveaceded

totheRSAaftertheEarlyConsentFeDeadlinebut

onorbeforetheBaseConsentFeDeadline.

AsumingthatsuchSchemeCreditorswilhave

compliedwiththerelevantermsoftheRSAandwil

receivetheBaseConsentFeinanamountequalto

0.5%oftheagregateprincipalamountoftheEligible

RestrictedDebtheldbysuchConsentingCreditoras

oftheBaseConsentFeDeadline,BaseConsentFe,

beingMCB1inprincipalamountofUS$4,879,972.12

wilbeisued.

Isuedate:RestructuringEfectiveDate

Maturity:InrespectofMCB1,thedatefalingsixmonthsfromthe

isuedate,withtheoutstandingprincipalamountofthe

MCB1mandatorilyconvertedintotheSharesatmaturity,

subjectothetermsandconditionsoftheMCB1.

InrespectofMCB2,thedatefalingthirtymonthsfromthe

earlierof31December2025andtheisuedate,withthe

outstandingprincipalamountoftheMCB2mandatorily

convertedintotheSharesatmaturity,subjectotheterms

andconditionsoftheMCB2.

Interest:TheMCBsarenotinterestbearing.

Conversion

events/period:

(a)OrdinaryConversion:

MCB1:

Atanytimebeforethedatefalingtwenty(20)

businesdayspriortothematuritydate,anyholderof

theMCB1maydeliveraconversionoticetoconvert

alorpartoftheMCB1itholdsintoSharesathe

MCB1ConversionPrice.

MCB2:

Duringtheperiodafter(andincluding)thedate

faling18monthsafterthearlierof31December

2025andtheRestructuringEfectiveDateandbefore

thedatefaling20businesdayspriortothematurity

date,anyholderoftheMCB2maydeliveranoticein

respectofalorpartoftheMCB2itholdsintoShares

atheMCB2ConversionPrice.

Duringtheperiodafter(andincluding)the

RestructuringEfectiveDateto(andexcluding)the

datefaling18monthsafterthearlierof31

December2025andtheRestructuringEfectiveDate,

theCompanymay,atitsolediscretionandbygiving

priornoticetoalholdersoftheMCB2,ononeor

moreocasions,declarethataloruptoaspecified

amountoftheMCB2maybeconvertedintoSharesat

theoptionofanyholderoftheMCB2,inwhichcase

anyholderoftheMCB2maydeliveraconversion

noticeinrespectofalorpartoftheMCB2itholds

intoShares.Incaseonlyuptoaspecifiedamountof

theMCB2(butnotaloftheMCB2)aredeclaredby

theCompanytobeconvertible,theMCB2shalbe

convertedonafirst-come-firstservedbasisacording

totheconversiondate(asdefinedinthetermsand

conditionsoftheMCB2)ofeachconversion.Sunac

InternationalhasnotifiedtheCompanythat,inthe

eventhatonlyuptoaspecifiedamountoftheMCB2

(butnotaloftheMCB2)aredeclaredbythe

Companytobeconvertible,SunacInternational

agrestodeferitsconversionafteraltheother

convertingholders’conversionrequestshaveben

fulfiled,andintheventhatheamountofMCB2of

altheconvertingholdersexcedsuchspecified

amount,SunacInternational’sconversionrequestwil

notbeprocesedatal.

(b)MaturityMandatoryConversion:

AlremainingMCBsoutstandingasofthedatefaling

20businesdayspriortothematuritydateshalbe

mandatorilyconvertedintoSharesatheaplicable

maturitydate,providedthatifanyofthebelowevents

hasocuredandiscontinuingatanytimeduringthe

periodfromandincludingtherecordatesetoutin

thetermsandconditionsoftherelevantMCB,and(in

thecaseofeventinparagraph(iv)only)(1)the

truste,ifsorequestedinwritingbytheholdersofnot

lesthan10percent.inprincipalamountofthe

relevantMCBthenoutstandingwithatotal

outstandingprincipalamountofnolesthan

US$200,000,000or(2)holder(s)ofnotlesthan10

percent.inprincipalamountoftherelevantMCB

thenoutstandingwithatotaloutstandingprincipal

amountofnolesthanUS$200,000,000,havegiven

noticeinwritingtotheCompanyelectingthe

suspensionofthemandatoryconversionofthe

relevantMCB,thentherelevantMCBheldbyal

holdershalnotbesomandatorilyconvertedinto

(i)windingupordergrantedagainstheCompany;

(i)delistingoftheCompany’shares;

(i)suspensionoftradingoftheCompany’shares

asetoutinthetermsoftherelevantMCB;and

(iv)failuretodeliverMCBConversionShares

subjectothetermsandconditionsofthe

relevantMCB,

providedthatnonoticeinwritinghasbengivento

theCompanythatherelevantMCBhavebecomedue

andpayablepursuantothetermsandconditionsof

therelevantMCBanduponalevent(s)aboveceasing

tobecontinuing,themandatoryconversionshalbe

resumedinacordancewiththetermsandconditions

oftherelevantMCB.

(c)EarlyMandatoryConversion:

Notwithstandinganythingtothecontraryintheterms

andconditionsoftherelevantMCB,atanytimeafter

thetotalprincipalamountofMCB1outstandingis

lesthanUS$500,000,000(inrespectofMCB1)or

US$250,000,000(inrespectofMCB2),theCompany

maydeliveramandatoryconversionotificationand

alremainingMCB1orMCB2(asaplicable)

outstandingshalbemandatorilyconvertedinto

SharesonthedatespecifiedbytheCompany,subject

tothetermsandconditionsoftherelevantMCB.

(d)AceleratedConversion(forMCB2only):

UndertheMCB2,theaceleratedconversionevents

are:

•

incurenceofanynewdebtsbytheCompany

aftertheRestructuringEfectiveDate,otherthan

normaloperatingexpensesincuredinthe

ordinarycourseofbusines;

•

breachofotherobligationsunderMCB2;

•

crosaceleration,judgement/involuntary

proceding/voluntaryprocedinginrespectof

theCompanyandtheSubsidiaryGuarantors

(withrelevantcarveoutsasetoutintheterms

oftheMCB2);

•

exceptaspermitedunderthetrustdedrelating

totheMCB2,anyGuarantebecomes

unenforceableorinvalidorshalforanyreason

ceasetobeinfulforceandefectwithrespecto

anySubsidiaryGuarantor,orisclaimedtobe

unenforceable,invalidornotinfulforceand

efectbyanySubsidiaryGuarantor;

•

exceptaspermitedundertheTrustDed,any

securitydocumentbecomesunenforceableor

invalidorshalforanyreasonceasetobeinful

forceandefectorisclaimedtobe

unenforceable,invalidornotinfulforceand

efectbyanySubsidiaryGuarantorPledgoror

theCompany;

•

windingupordergrantedagainstheCompany;

•

delistingoftheCompany’shares;

•

suspensionoftradingoftheCompany’shares

asetoutinthesectionheaded“Payment

acelerationevents”belowtermsoftheMCB2;

and

•

failuretodeliverMCBConversionShares

subjectothetermsandconditionsoftheMCB

Upontheocurenceofanyoftheacelerated

conversionevents,theMCB2wilbecome

convertiblesubjectothetermsoftheMCB2.

Restrictionon

conversion:

Aconversionrightmaynotbexercisedinrespectofthe

MCBswheretheCompanyhasalreadyexerciseditsright,

bydeliveringordepositingtherelevantredemption/

repurchasenotice,toredemorepurchasesuchMCBsin

acordancewiththetermsandconditionsoftheMCBs,

providedthathisrestrictiononexerciseofconversionright

shalceasetoaplyiftheCompanyfailstoredemor

repurchasesuchMCBsinacordancewiththerelevant

redemption/repurchasenotice.

Conversionprice:MCB1

SubjectothetermsandconditionsoftheMCB1,theMCB

1ConversionPriceisinitialyHK$6.80perShare,which

maybeadjustedupontheocurenceoftheadjustment

eventsetoutintheparagrapheaded“Adjustmentevents”

below.

TheinitialMCB1ConversionPriceofHK$6.80perShare

represents:

(a)apremiumofaproximately330.38%overtheclosing

priceofHK$1.58perShare(the“RSAClosing

Price”)asquotedontheStockExchangeon17April

2025,beingthedateofthesigningoftheRSA(the

“RSADate”);

(b)apremiumofaproximately341.56%overtheclosing

priceofHK$1.54perShareasquotedontheStock

ExchangeontheLatestPracticableDate(the“LPD

ClosingPrice”);and

(c)apremiumofaproximately352.13%overthe

averageclosingpriceofHK$1.504perShareas

quotedontheStockExchangeforthefiveconsecutive

tradingdaysoftheSharesimediatelyprecedingthe

LatestPracticableDate.

MCB2

SubjectothetermsandconditionsoftheMCB2,theMCB

2ConversionPriceisinitialyHK$3.85perShare,which

maybeadjustedupontheocurenceoftheadjustment

eventsetoutintheparagrapheaded“Adjustmentevents”

below.

TheinitialMCB2ConversionPriceofHK$3.85perShare

represents:

(a)apremiumofaproximately143.67%overtheRSA

ClosingPriceofHK$1.58perShare;

(b)apremiumofaproximately150.00%overtheLPD

ClosingPriceofHK$1.54perShare;and

(c)apremiumofaproximately155.98%overthe

averageclosingpriceofHK$1.504perShareas

quotedontheStockExchangeforthefiveconsecutive

tradingdaysoftheSharesimediatelyprecedingthe

LatestPracticableDate.

EachoftheMCB1ConversionPriceandtheMCB2

ConversionPricewasdeterminedafterarms’length

negotiationsbetwentheCompanyandtheInitial

ConsentingCreditorsaftertakingintoacount,among

otherthings,thesharepriceperformanceoftheCompany

andtheasesmentofaceptabilityofSchemeCreditors

towardsthetermsoftheRestructuringwithaviewto

achievingasustainablecapitalstructure.Eachoftheinitial

MCB1ConversionPriceofHK$6.80perShareandthe

initialMCB2ConversionPriceofHK$3.85perShareisat

apremiumtotheRSAClosingPriceofHK$1.58perShare.

Adjustmentevents:SubjectothetermsoftheMCBs,eachoftheMCB1

ConversionPriceandtheMCB2ConversionPriceshalbe

subjectoadjustmentupontheocurenceofcertain

adjustmenteventsincluding:

(a)analterationtothenominalvalueoftheSharesasa

resultofconsolidation,sub-division,redesignationor

reclasification;

(b)anisue(otherthaninlieuofcashdividendandother

thanisuethatwouldamountocapitaldistribution)

ofanySharescreditedasfulypaidtothe

Shareholdersbywayofcapitalisationofprofitsor

reserves(includinganysharepremiumacount);

(c)anisuebywayofascripdividendwherethe

agregatevalueofsuchisuexcedstheamountof

therelevantcashdividendortherelevantparthereof

andwhichwouldnothaveconstitutedacapital

distribution;

(d)acapitaldistributiontotheShareholders;

(e)anisueofSharestoalorsubstantialyal

Shareholdersasaclasbywayofrights,orisueor

grantoalorsubstantialyalShareholdersasaclas

bywayofrights,options,warantsorotherightsto

subscribefororpurchaseorotherwiseacquireany

Shares,ineachcaseatlesthan85percent.ofthe

curentmarketpriceperShareonthedateofthefirst

publicanouncementofthetermsoftheisueor

grant;

(f)anisueofothersecuritiestoalorsubstantialyal

Shareholdersasaclasbywayofrights,orgrantoal

orsubstantialyalShareholdersasaclasbywayof

rights,options,warantsorotherightstosubscribe

fororpurchaseorotherwiseacquireanyother

securities;

(g)anisue(otherwisethanasmentionedinparagraph(e)

above)ofanyShares(otherthan(i)Sharesisuedon

thexerciseofconversionrightsatachingtotheMCB

1or(i)Sharesisuedonthexerciseofconversion

rightsatachingtotheMCB2)orisueorgrant

(otherwisethanasmentionedinparagraph(e)above)

anyoptions,warantsorotherightstosubscribefor,

purchaseorotherwiseacquireShares,ineachcaseata

priceperSharewhichislesthan85percent.ofthe

curentmarketpriceonthedateofthefirstpublic

anouncementofthetermsofsuchisue;

(h)otherisuesofsecuritieswhichbytheirtermsofisue

caryrightsofconversioninto,orexchangeor

subscriptionfor,SharestobeisuedbytheCompany

uponconversion,exchangeorsubscriptionata

considerationperSharewhichislesthan85percent.

ofthecurentmarketpriceonthedateofthefirst

publicanouncementofthetermsofisueofsuch

securities;

(i)modificationoftherightsofconversion,exchangeor

subscriptionatachedtoanysuchsecuritiesasare

mentionedinparagraph(h)above(otherthanin

acordancewiththetermsofsuchsecurities),sothat

theconsiderationperShareisreducedandislesthan

85percent.ofthecurentmarketpriceonthedateof

anouncementoftheproposalforsuchmodification;

and

(j)isues,saleordistributionbytheCompanyoranyof

itsubsidiariesor(athedirectionorequestofor

pursuantoanyarangementswiththeCompanyor

anyofitsubsidiaries)anyothercompany,personor

entityofanysecuritiesinconectionwithanofer

pursuantowhichtheShareholdersgeneralyare

entitledtoparticipateinarangementswherebysuch

securitiesmaybeacquiredbythem.

Notwithstandinganythingtothecontraryinthetermsand

conditionsoftheMCBs,noadjustmentwilbemadetothe

MCB1ConversionPriceortheMCB2ConversionPrice:

(i)whenShares,optionsorothersecuritiesareisued,

ofered,exercised,aloted,apropriated,modifiedor

grantedtorforthebenefitofEligibleParticipants

pursuantotheESOP;or

(i)whenShares,optionsorothersecuritiesareisued,

ofered,exercised,aloted,apropriated,modifiedor

grantedtorforthebenefitofanyStrategicInvestor,

unlestheisuepriceisbelowHK$5perShare(the

“MinimalStrategicInvestorSharePrice”).

WhenShares,optionsorothersecuritiesareisued,

ofered,exercised,aloted,apropriated,modifiedor

grantedtorforthebenefitofanyStrategicInvestorathe

isuepriceofbelowHK$5perShare,anadjustmentmaybe

madetotheMCB1ConversionPriceortheMCB2

ConversionPriceinthescenariosin(g)or(h)aboveifsuch

isuepriceisalsolesthan85percent.ofthecurent

marketpriceonthedateofthefirstpublicanouncementof

thetermsofisueofsuchShares,optionsorother

securities.

Ifanadjustmentisrequiredinthescenarioin(g)above,the

MCBConversionPriceshalbeadjustedbymultiplyingthe

MCBConversionPriceinforceimediatelybeforesuch

isuebythefolowingfraction:

A+B

Where:

AistheagregatenumberofSharesinisue

imediatelybeforetheisueofsuchaditional

Sharesorthegrantofsuchoptions,warantsorother

rightstosubscribefororpurchaseorotherwise

acquireanyShares;

BisthenumberofShareswhichtheagregate

considerationreceivablefortheisueofthemaximum

numberofSharestobeisuedorthexerciseofsuch

options,warantsorotherightswouldpurchaseat

suchcurentmarketpriceperShare;and

CistheagregatenumberofSharesinisue

imediatelyaftertheisueofsuchaditionalShares.

Ifanadjustmentisrequiredinthescenarioin(h)above,the

MCBConversionPriceshalbeadjustedbymultiplyingthe

MCBConversionPriceinforceimediatelybeforesuch

isuebythefolowingfraction:

A+B

A+C

Where:

AistheagregatenumberofSharesinisue

imediatelybeforesuchisue;

BisthenumberofShareswhichtheagregate

considerationreceivablebytheCompanyforthe

Sharestobeisuedonconversionorexchangeoron

exerciseoftherightofsubscriptionatachedtosuch

securitieswouldpurchaseatsuchcurentmarketprice

perShareonthedateofsuchanouncement;and

CisthemaximumnumberofSharestobeisuedon

conversionorexchangeofsuchsecuritiesoronthe

exerciseofsuchrightsofsubscriptionatached

theretoatheinitialconversion,exchangeor

subscriptionpriceorateontheisuedateofsuch

securities.

Therationaletoincludesuchcarveoutoadjustmentothe

MCBConversionPriceisthatheintroductionofStrategic

InvestorswouldbebeneficialtotheGroupasawhole.In

suchcase,theCompanyisoftheviewthatanti-dilution

protectionforholdersoftheMCBshouldnotaply.

TheMinimalStrategicInvestorSharePriceofHK$5per

Sharehasbendeterminedafternegotiationsbetwenthe

Companyandthecreditorsandtheiradvisoraftertaking

intoacount,amongotherthings:

(1)thefectiveMCB2ConversionPriceofHK$5,being

HK$3.85/77%aftertakingintoacount23%ofthe

MCBsatributabletotheSchemeCreditorsas

RestructuringConsiderationwilbeusedforthe

ShareholdingStructureStabilityArangement.The

efectiveMCB2ConversionPriceonlytakesinto

acountheportionofMCB2thatheScheme

Creditorsareactualyisued,hencetheMCB2

ConversionPriceisdividedby77%toariveathe

efectiveMCB2ConversionPrice.Furthermore,only

theMCB2ConversionPrice(butnotheMCB1

ConversionPrice)wastakenintoacountgiventhat

anyStrategicInvestorwouldtendtobealong-term

investoroftheCompany.HencetheMCB2

ConversionPricewouldbeamorerelevantreference

pointgiventhatheMCB2’stenureis30months

whiletheMCB1’stenureisonly6months;

(2)thesharepriceperformanceoftheCompany;and

(3)theasesmentofaceptabilityofcreditorstowards

thetermsoftheRestructuring,

andintheopinionoftheCompany,suchpriceisfairand

reasonableandintheinterestsoftheCompanyandthe

Shareholdersasawhole.

BasedonthediscusionwiththeManagementandour

review,weunderstandthat(i)itisanormalcomercial

termthatheSchemeCreditorswouldreasonablyexpect

anti-dilutionarangementobeinplaceinthecaseofany

isuancewithisuepricesbelowthoseoftheMCB

ConversionPrices(asdefinedbelow)ortherelevant

efectiveconversionpricesoftheMCBs;(i)theMinimal

StrategicInvestorSharePriceofHK$5wasetathe

efectiveMCB2ConversionPrice,being(a)theMCB2

ConversionPrice(i.e.HK$3.85);dividedby(b)thenet

percentageoftheMCBsatributabletotheScheme

CreditorsaftertheShareholdingStructureStability

Arangement(i.e.77%);(i)theMinimalStrategic

InvestorSharePriceofHK$5(orthefectiveMCB2

ConversionPrice)wouldbeinfactbelowthefective

conversionpriceoftheMCBsatributabletotheScheme

Creditors;(iv)bycomparingwiththeshareprice

performanceoftheCompanyduringtheReviewPeriod(as

definedbelow),theMinimalStrategicInvestorSharePrice

ofHK$5representsapremiumofaproximately192.40%

overtheaverageSharepriceofHK$1.71duringtheReview

Period(asdefinedbelow);and(v)whentheCompany

introducesStrategicInvestorwithisuancesatisueprices

abovetheMinimalStrategicInvestorSharePrice,no

adjustmentwilbemadetotheMCBConversionPrices

evenwhentheabovementionedscenarios(g)or(h)above

aply,whichisbeneficialtotheCompanyforintroducing

StrategicInvestorsinthefuture.Giventhecurentfinancial

andoperationalconditionsoftheGroupandthecurent

industryconditions,thepotentialintroductionofStrategic

Investorscouldoferpositivesuportothelong-term

businesrecoveryoftheGroup.Inlightoftheabove,we

areoftheviewthatheMinimalStrategicInvestorShare

Priceisfairandreasonable.

Maximumnumberof

MCBConversion

Sharestobeisued:

MCB1

(i)AsumingisueofMCB1inthemaximumagregate

principalamountofUS$9,710,670,612.75(beingthe

agregateof100%oftheMaximumScheme

Creditors’ClaimsandtheConsentFes)

AsumingthatMCB1inthemaximumagregate

principalamountofUS$9,710,670,612.75(beingthe

agregateof100%oftheMaximumScheme

Creditors’ClaimsandtheConsentFes)wilbe

isuedbytheCompanyandasumingfulconversion

oftheMCB1atheMCB1ConversionPriceof

HK$6.80perShareandbasedontheagredexchange

rateofUS$1=HK$7.8,upto11,138,710,407MCB1

ConversionShareswilbealotedandisued,which

represent:

(a)aproximately97.11%ofthexistingisued

sharecapitaloftheCompanyasatheLatest

PracticableDate;

(b)aproximately49.27%oftheisuedshare

capitaloftheCompanyasenlargedbythe

alotmentandisueofsuchMCB1Conversion

Shares;

(c)aproximately46.89%oftheisuedshare

capitaloftheCompanyasenlargedby(i)the

alotmentandisueofsuchMCB1Conversion

Shares,and(i)thealotmentandisueofShares

pursuantotheESOPasumingthathePlan

MandateLimitof1,146,984,354Sharesisfuly

utilized(furtherasumingthereisnother

changeintheisuedsharecapitalofthe

Company);and

(d)aproximately45.82%oftheisuedshare

capitaloftheCompanyasenlargedby(i)the

alotmentandisueofsuchMCB1Conversion

Shares,and(i)subjectobtainingtherequisite

shareholders’aprovalundertheListingRules,

thealotmentandisueofSharespursuantothe

ESOPasumingthathePlanMandateLimitof

1,701,719,114Sharesisfulyutilized(further

asumingthereisnotherchangeintheisued

sharecapitaloftheCompany).

TheMCB1ConversionShares,uponfulconversion,

shalhaveanagregatenominalvalueofupto

HK$1,113,871,040.70.

(i)AsumingisueofMCB1intheagregateprincipal

amountofUS$7,298,170,612.75(beingtheagregate

of75%oftheMaximumSchemeCreditors’Claims

andtheConsentFes)

AsumingthatMCB1intheagregateprincipal

amountofUS$7,298,170,612.75(beingtheagregate

of75%oftheMaximumSchemeCreditors’Claims

andtheConsentFes)wilbeisuedbytheCompany

andasumingfulconversionoftheMCB1athe

MCB1ConversionPriceofHK$6.80perShareand

basedontheagredexchangerateofUS$1=HK$7.8,

upto8,371,430,996MCB1ConversionShareswilbe

alotedandisued,whichrepresent:

(a)aproximately72.99%ofthexistingisued

sharecapitaloftheCompanyasatheLatest

PracticableDate;

(b)aproximately42.19%oftheisuedshare

capitaloftheCompanyasenlargedbythe

alotmentandisueofsuchMCB1Conversion

Shares;

(c)aproximately32.36%oftheisuedshare

capitaloftheCompanyasenlargedby(i)the

alotmentandisueofsuchMCB1Conversion

Shares,(i)thealotmentandisueofMCB2

ConversionSharesuponfulconversionofthe

MCB2inthemaximumprincipalamountof

US$2,412,500,000.00atheMCB2Conversion

PriceofHK$3.85perShare,and(i)the

alotmentandisueofSharespursuantothe

ESOPasumingthathePlanMandateLimitof

1,146,984,354Sharesisfulyutilized(further

asumingthereisnotherchangeintheisued

sharecapitaloftheCompany);and

(d)aproximately31.48%oftheisuedshare

capitaloftheCompanyasenlargedby(i)the

alotmentandisueofsuchMCB1Conversion

Shares,(i)thealotmentandisueofMCB2

ConversionSharesuponfulconversionofthe

MCB2inthemaximumprincipalamountof

US$2,412,500,000.00atheMCB2Conversion

PriceofHK$3.85perShare,and(i)subjecto

obtainingtherequisiteshareholders’aproval

undertheListingRules,thealotmentandisue

ofSharespursuantotheESOPasumingthat

thePlanMandateLimitof1,861,317,829Shares

isfulyutilized(furtherasumingthereisno

otherchangeintheisuedsharecapitalofthe

Company).

TheMCB1ConversionShares,uponfulconversion,

shalhaveanagregatenominalvalueofupto

HK$837,143,099.60.

MCB2

AsumingthatMCB2inthemaximumagregateprincipal

amountofUS$2,412,500,000.00(being25%ofthe

MaximumSchemeCreditors’Claims)wilbeisuedbythe

CompanyandasumingfulconversionoftheMCB2athe

MCB2ConversionPriceofHK$3.85perShareandbased

ontheagredexchangerateofUS$1=HK$7.8,upto

4,887,662,336MCB2ConversionShareswilbealoted

andisued,whichrepresent:

(a)aproximately42.61%ofthexistingisuedshare

capitaloftheCompanyasatheLatestPracticable

Date;

(b)aproximately29.88%oftheisuedsharecapitalof

theCompanyasenlargedbythealotmentandisueof

suchMCB2ConversionShares;

(c)aproximately18.89%oftheisuedsharecapitalof

theCompanyasenlargedby(i)thealotmentand

isueofsuchMCB2ConversionShares,(i)the

alotmentandisueofMCB1ConversionShares

uponfulconversionoftheMCB1intheprincipal

amountofUS$7,298,170,612.75atheMCB1

ConversionPriceofHK$6.80perShare,and(i)

alotmentandisueofSharespursuantotheESOP

asumingthathePlanMandateLimitof

1,146,984,354Sharesisfulyutilized(further

asumingthereisnotherchangeintheisuedshare

capitaloftheCompany);and

(d)aproximately18.38%oftheisuedsharecapitalof

theCompanyasenlargedby(i)thealotmentand

isueofsuchMCB2ConversionShares,(i)the

alotmentandisueofMCB1ConversionShares

uponfulconversionoftheMCB1intheprincipal

amountofUS$7,298,170,612.75atheMCB1

ConversionPriceofHK$6.80perShare,and(i)

subjectobtainingtherequisiteshareholders’

aprovalundertheListingRules,thealotmentand

isueofSharespursuantotheESOPasumingthat

thePlanMandateLimitof1,861,317,829Sharesis

fulyutilized(furtherasumingthereisnother

changeintheisuedsharecapitaloftheCompany).

TheMCB2ConversionShares,uponfulconversion,

shalhaveanagregatenominalvalueofupto

HK$488,766,233.60.

ThemaximumnumberofMCBConversionShares

wilbealotedandisuedwhentheprincipalamount

oftheMCB1tobeisuedwouldrepresenthe

agregateof75%oftheMaximumSchemeCreditors’

ClaimsandtheConsentFes,andtheprincipal

amountoftheMCB2tobeisuedwouldrepresent

25%oftheMaximumSchemeCreditors’Claims.

Basedontheabovefigures,themaximumnumberof

MCBConversionShares(thesumof8,371,430,996

MCB1ConversionSharesand4,887,662,336MCB2

ConversionShares)thatmaybealotedandisuedby

theCompanyis13,259,093,332.

Securityandguarante:TheMCBswilbesecuredbythechargesovertheshares

heldbytheCompanyoraSubsidiaryGuarantorPledgorin

theSubsidiaryGuarantorstobesharedamongtheMCB1,

theMCB2andanyotherpermitedparipasusecured

indebtednes.

TheMCBswilbejointlyandseveralyguarantedbythe

SubsidiaryGuarantors.

SubjectothetermsoftheMCBs,thesecurityand

guarantemaybenforcedupontheocurenceofpayment

acelerationeventsundertheMCBswheretheMCBs

wouldbecomedueandpayable.TheCompanywilases

theListingRulesimplicationsarisingfromanysuch

enforcementbasedonthethenprevailingfactsand

circumstancesandcomplywiththerelevantrequirements

undertheListingRules,ifaplicable.

Redemptionevents:(a)RedemptionatheoptionoftheCompany

Subjectotheredemptionrestrictionsetoutbelow

andtheothertermsoftherelevantMCB,ongivingnot

lesthan15businesdays’noticetotheholdersofthe

relevantMCBandtothetrusteandprincipalagent

(whichnoticeshalbeirevocable),theCompanymay

redemaloranypartofsuchMCBonthedate

specifiedinthenoticeatheirprincipalamountasat

suchdate,atanytime.

(b)Redemptionfortaxationreasons

SubjectothetermsoftherelevantMCB,atanytime

theCompanymay,havingivenotlesthan15

businesdays’noticetotheholdersoftherelevant

MCB,thetrusteandtheprincipalagent(which

noticeshalbeirevocable)redemalbutnotsome

onlyofsuchMCBatheirprincipalamountasatsuch

dateif(i)theCompany(oriftheguaranteswere

caled,anySubsidiaryGuarantor)hasorwilbecome

obligedtopayaditionaltaxationamountsasaresult

ofanychangein,oramendmento,thelawsor

regulationsoftherelevantjurisdictions,and(i)such

obligationcanotbeavoidedbytheCompany(orthe

relevantSubsidiaryGuarantor,asthecasemaybe)

takingreasonablemeasuresavailabletoit.

Redemptionrestriction:TheCompanymayredemorepurchasetheoutstanding

MCBs,throughtenderofersorotherofersofpurchases

thataremadetoalholdersoftheMCBs(subjecto

customaryexclusionsforcompliancewiththesecurities

lawsofrelevantjurisdictions),providedthat:(a)nopen

marketrepurchaseoftheMCBshalbemade;and(b)to

thextentanyMCBswhichwerealocatedtoandreceived

byMr.Sunoranyofhisafiliatesorotherdesignated

personsundertheShareholdingStructureStability

Arangementremainoutstanding,theCompanyshalnot

redemorepurchasesuchBondsheldbyMr.Sunoranyof

hisafiliatesorotherdesignatedpersons.

Paymentaceleration

events:

PaymentacelerationeventsundertheMCBsareas

folows:

•

windingupordergrantedagainstheCompany;

•

delistingoftheCompany’shares;

•

suspensionoftradingoftheCompany’sharesaset

outinthetermsoftheMCBs;and

•

failuretodeliverConversionSharesubjectothe

termsandconditionsoftheMCBs

Ifanyofthepaymentacelerationeventshasocuredand

iscontinuing,theMCB1orMCB2(asaplicable)maybe

declaredueandpayablesubjectothetermsofthe

relevantMCB.

Ranking:TheMCBsconstitutedirect,unsubordinated,unconditional

andsecuredobligationsoftheCompany,andshalatal

timesrankparipasuandwithoutanypreferenceor

priorityamongthemselves.Thepaymentobligationsofthe

CompanyundertheMCBshal,saveforsuchexceptions

asmaybeprovidedbyaplicablelaw,ataltimesrankat

leastequalywithalitsotherpresentandfutureunsecured

andunsubordinatedobligations.

TheMCB1andtheMCB2benefitfromthesame

SubsidiaryGuarantesandchargesoverthesharesheldby

theCompanyoraSubsidiaryGuarantorPledgorinthe

SubsidiaryGuarantors.

TheMCBConversionShares,whenalotedandisuedtoa

holder,shalrankparipasuinalrespectswiththeShares

inisueonthedateonwhichsucholderisregisteredas

suchintheCompany’sregisterofmembers.

Votingrights:Theholder(s)oftheMCBshalnothaveanyrighto

atendorvoteinanygeneralmetingoftheCompany.

Transferability:TheMCBarefrelytransferablesubjectoconditions.

Aplicationforlisting:AnaplicationwilbemadebytheCompanytotheListing

ComiteoftheStockExchangeforlistingof,and

permisiontodealin,theMCBConversionShares.

Anaplicationwilbemadeforthelistingandquotationof

theMCBsontheSGX.

4.EvaluationofthekeytermsoftheConectedMCBIsue

4.1IsueofMCBstoSunacInternationalasaSchemeCreditor

TheSchemeCreditorscomprisethepersonswhoholdbeneficialinterestsas

principalin,orwhoarethelendersunder,theinstrumentsatheRecordTimeforthe

Scheme,aslistedoutunderthesectionheaded“9.INFORMATIONONTHEXISTING

DEBTUNDERTHESCHEME”intheLeterfromtheBoard.

AsatheLatestPracticableDate,SunacInternational,astheholderoftheSunac

InternationalMCB,isoneoftheSchemeCreditors.Similartotherholdersofthe

ExistingDebtandsubjectotheElectionandAlocationMechanism,theSunac

InternationalMCBheldbySunacInternationalwilbexchangedintoMCBsinthe

Restructuring.Therefore,thetermsandconditionsfortheisuanceofMCBstoSunac

InternationalarethesameastheotherSchemeCreditors.

AsatheLatestPracticableDate,theagregateprincipalamountoftheSunac

InternationalMCBoutstandingwasUS$15,812,060.00.ItisestimatedthatSunac

International,asaSchemeCreditor,maybeisuedMCBsintheprincipalamountofup

toUS$15,812,060.00.SunacInternationalwilnotbereceivinganyConsentFesunder

theScheme.

4.2Sharepricecomparisons

MCB1

SubjectothetermsandconditionsoftheMCB1,theMCB1Conversion

PriceisinitialyHK$6.80perShare,whichmaybeadjustedupontheocurenceof

theadjustmentevents.TheinitialMCB1ConversionPriceofHK$6.80perShare

represents:

(i)apremiumofaproximately330.38%overtheRSAClosingPriceof

HK$1.58perShare;

(i)apremiumofaproximately347.96%overtheaverageclosingpriceof

HK$1.52perShareasquotedontheStockExchangeforthefive

consecutivetradingdaysoftheSharesuptoandincludingtheRSADate

(the“AverageClosingPrice”);and

(i)apremiumofaproximately341.56%overtheLPDClosingPriceof

HK$1.54perShare.

MCB2

SubjectothetermsandconditionsoftheMCB2,theMCB2Conversion

PriceisinitialyHK$3.85perShare,whichmaybeadjustedupontheocurenceof

theadjustmentevents.TheinitialMCB2ConversionPriceofHK$3.85perShare

represents:

(i)apremiumofaproximately143.67%overtheRSAClosingPriceof

HK$1.58perShare;

(i)apremiumofaproximately153.62%overtheAverageClosingPriceof

HK$1.52perShare;and

(i)apremiumofaproximately150.00%overtheLPDClosingPriceof

HK$1.54perShare.

4.3Historicalsharepriceperformance

InordertoasesthefairnesandreasonablenesoftheMCB1ConversionPriceat

HK$6.80perShareandMCB2ConversionPriceatHK$3.85perShare(colectivelythe

“MCBConversionPrices”),wehavereviewedthedailyclosingpricesoftheShares

duringtheperiodfrom18April2024totheRSADate(i.e.17April2025),being

aproximatelyoneyearpriortotheRSADate(the“ReviewPeriod”).Weconsiderthat

theReviewPeriodisadequatetoilustratetherecentpricemovementoftheSharesfor

conductingareasonablecomparisonamongthehistoricalclosingpricesoftheShares

andhavingfactoredintothecapitalmarketasesmentoftheCompanyduringthe

ReviewPeriod.Suchcomparisonisrelevantfortheasesmentofthefairnesand

reasonablenesofMCBConversionPrices.Thefolowingdiagramsetsouthedaily

closingpricesoftheSharesontheStockExchangeduringtheReviewPeriod:

Chart1:MovementoftheclosingpricesoftheSharesduringtheReviewPeriod

Apr 24Apr 25Mar 25Feb 25Jan 25Dec 24Nov 24Oct 24Sep 24Aug 24Jul 24Jun 24May 24

HK$

Closing PriceMCB 1 Conversion PriceMCB 2 Conversion Price

AsilustratedinChart1above,theclosingpricesoftheSharestradedinarange

betwenthelowestofHK$0.91perShareon16September2024(the“LowestClosing

Price”)tothehighestofHK$4.60perShareon2October2024(the“HighestClosing

Price”)duringtheReviewPeriodwithanaverageofHK$1.71perShare.TheMCB1

ConversionPricerepresentspremiumsofaproximately647.25%andaproximately

47.83%overtheLowestClosingPriceandtheHighestClosingPrice,respectively.The

MCB2ConversionPricerepresentsapremiumovertheLowestClosingPriceof

aproximately323.08%andadiscountotheHighestClosingPriceofaproximately

16.30%.TheMCB2ConversionPriceislightlybelowtheuperboundoftheShare

closingpricesduringtheReviewPeriod.TheMCB1ConversionPriceandMCB2

ConversionPricerepresentpremiumsovertheaverageSharepriceHK$1.71by

aproximately297.66%and125.15%respectively.

ApartfromthecustomaryanouncementsmadebytheCompanyintermsofits

interimand/oranualresultsanouncements,andtheisueofinterimand/oranual

reportsandcircularforitsanualgeneralmetingduringtheReviewPeriod,other

notableventsincluded:

(i)anouncementsinrelationtotheRestructuringandthePetition;

(i)anouncementsinrelationtotheOnshoreDebtRestructuring;

(i)anouncementsinrelationtotheExistingNotes(asdefinedintheLeterfrom

theBoard);

(iv)anouncementdated17March2025inrelationtoprofitwarningofthe

CompanyforFY2024;

(v)anouncementdated27January2025inrelationtothesigningofadebt

restructuringagrementbetwentheGroupandChinaCreditTrustCo.,Ltd.*

(中诚信托有限责任公司);

(vi)anouncementdated23January2025inrelationtoexistingdebtrestructuring

andnewfinancingoftheChongqingBayProject(asdefinedtherein);

(vi)anouncementdated29November2024inrelationtoadiscloseable

transactionwherebytheGroupdisposedofamajorequityinterestsinHarbin

IceandSnowWorldParkLimitedByShareLtd*(哈尔滨冰雪大世界股份有

限公司);

(vi)anouncementdated1November2024inrelationtoadiscloseable

transactioninvolvingtheupdateandadjustmentonthecoperation

arangementwithGuilinZhangtaiEnterpriseGroupLimited*(桂林彰泰实业

集团有限公司);

(ix)anouncementdated17October2024inrelationtothetop-uplacingof

existingSharesandsubscriptionofnewShareswithgrosprocedsof

aproximatelyHK$1.205bilion;

(x)PRCgovernmentauthoritiespublishedaseriesofpoliciestosuportand

improvetherealestateandstockmarketsinceSeptember2024,shareprices

ofrealestatecompanieslistedontheStockExchangegeneralyimproved;

(xi)anouncementdated20August2024inrelationtoprofitwarningofthe

Companyforthesixmonthsperiodended30June2024;and

(xi)anouncementdated30April2024inrelationtothedisciplinaryactions

imposedbytheShanghaiStockExchangeandShenzhenStockExchangeon

SunacRealEstateGroupCo.,Ltd.*(融创房地产集团有限公司),a

wholy-ownedsubsidiaryoftheCompany,andMr.WangMengde,an

executiveDirector.

AsadvisedbytheManagement,otherthantheventsmentionedabove,the

Managementisnotawareofanyeventsthatledtothefluctuationtrendintheclosing

pricesoftheSharesduringtheReviewPeriod.

IndependentShareholdershouldnotetheMCBConversionPriceseachsetata

significantpremiumtotherelevantclosingSharepricesesentialymeansthathereisa

similarsignificanthaircutontheprincipalamountsoftheExistingDebt.Thisfeatureis

aimedinimprovingtheoveralcapitalstructureoftheGroup,therebyenablingthe

GrouptoachievemeaningfuldeleverageoftheGroup’sofshoredebtsandtoestablisha

sustainablecapitalstructureoftheCompany,whichisthefocusoftheKeyRestructuring

Objectives.

Inlightoftheaboveanalysis,inparticular(i)theMCB1ConversionPrice(i.e.

HK$6.80)isignificantlyabovetherangeoftheShareclosingpricesthroughouthe

ReviewPeriodandtheMCB2ConversionPrice(i.e.HK$3.85)isonlyslightlybelowthe

uperboundoftheShareclosingpricesduringtheReviewPeriod;and(i)theMCB1

ConversionPriceandtheMCB2ConversionPricerepresentapremiumof330.38%and

143.67%,respectively,overtheRSAClosingPrice,weareoftheviewthatheMCB

ConversionPricesrepresentafavourablefeaturetotheIndependentShareholdersto

considerasdiscusedabove.

4.4ComparableMCBs

ToasesthefairnesandreasonablenesofthekeytermsoftheMCBs,including

theinterestrate,conversionpriceandtermtomaturity,wehaveconductedindependent

researchoftheproposedisueofmandatoryconvertiblebondsunderspecificmandate

anouncedbycompanieslistedontheMainBoardoftheStockExchangeinwhichtheir

circularswereisueduringtheperiodfrom18April2022totheRSADate(i.e.17April

2025),beingaproximatelythreyearspriortotheRSADate(the“MCBReview

Period”).Basedontheaboveselectioncriteria,wehaveidentifiedatotalofsix

mandatoryconvertiblebondisuances(the“ComparableMCBs”)toprovidean

asesmentoftherecentmarketpracticeinrelationtothekeytermsofmandatory

convertiblebondsundersimilarmarketconditions.WeconsiderthatheMCBReview

Periodisapropriatesinceitprovided,inouropinion,areasonableandmeaningful

numberofsamplesforouranalysispurposeandtheComparableMCBsasawhole

providesafairandrepresentativesample.

IndependentShareholdershouldnotethatheprincipalbusineses,market

capitalisation,profitabilityandfinancialpositionsofthecompaniesinrelationtothe

ComparableMCBsmaynotbesimilartothoseoftheCompany,andwehavenot

conductedanyin-depthinvestigationintorespectivebusinesesandoperationsofsuch

companies.AstheComparableMCBscanprovideageneralreferenceofthekeyterms

forsimilartransactionsinHongKongunderthecurentmarketconditions,weconsider,

tothebestofourknowledgeandability,thathelistofComparableMCBsisexhaustive,

fairandrepresentativeduringtheMCBReviewPeriodinasesingthefairnesand

reasonablenesofthekeytermsoftheConectedMCBIsue.

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Notes:

1.ConversionpricesofrespectiveComparableMCBsarextractedfromtherespectivecircularsin

relationtotheisueoftheComparableMCBs(the“ComparableMCBsCirculars”).

2.ToprovidemeaningfulreferencesforelativedilutionefectcausedbyconversionoftheMCBs,

relativedilutionefectofconversionoftherespectiveComparableMCBsiscalculatedbasedon

(i)theconversionoftherespectiveComparableMCBsonlyandwithoutakingintoacounthe

efectsontheshareholdingstructuringcausedbyothersecurities;and(i)alotheraplicable

asumptionsforderivingtherelativedilutionefectsontheshareholdingstructureofrespective

companiesbytheComparableMCBsastatedintheComparableMCBsCirculars.For

ilustrativepurpose,therelativedilutionefectpercentageiscalculatedbysubtracting(i)the

shareholdingpercentageofthepublicshareholdersuponfulconversionoftheComparable

MCBs(excludingtheholdersoftherespectiveComparableMCBs);from(i)theshareholding

percentageofthepublicshareholdersasatherelevantlatestpracticabledate;andthendivided

by(i)theshareholdingpercentageofthepublicshareholdersasatherelevantlatest

practicabledateasdisclosedintheComparableMCBsCirculars.

3.Insteadoftermstomaturity,onlymaturitydatesofthemandatoryconvertiblebondsofKaisa

GroupHoldingsLtd.weredisclosedintherespectiveComparableMCBsCirculars.

4.TheprincipalamountoftheMCB1includestheConsentFestobepaidbytheMCB1.

5.Theinformationandfiguresunderthistablewerextractedfromand/orcalculatedbasedonthe

informationdisclosedintherespectiveComparableMCBsCirculars.

6.Calculatedbasedontheinitialminimumconversionpriceoftherespectivemandatory

convertiblebondsofthePreviousRestructuring(asdefinedbelow).

7.Calculatedbasedontheinitialconversionpriceoftherespectivemandatoryconvertiblebondsof

thePreviousRestructuring(asdefinedbelow).

8.TherelativedilutionefectoftheMCBsiscalculatedbasedontheasumptionsandshareholding

structurebeforeanduponfulconversionoftheMCBsasetoutinthesectionheaded“Relative

Dilutionefect”below.

Interestrate

AshowninTable3above,theinterestrateforaltheComparableMCBswas

nil,whichisthesameastheMCBs,weconsiderthefacthatheMCBswilnot

bearanyinterestobeonormalcomercialtermsandintheinterestsofthe

CompanyandtheShareholdersasawhole.

Termtomaturity

ThetermtomaturityoftheComparableMCBsrangedfrom1.0yearto5.0

years,withanaveragetermofaproximately2.9years.

Ononehand,thetermtomaturityoftheMCB2is30months(i.e.2.5years)

fromthearlierof31December2025andtheRestructuringEfectiveDateand

falswithinsuchrangeoftheComparableMCBsbutisbelowtheaveragetermto

maturityoftheComparableMCBs.

Ontheotherhand,thetermtomaturityoftheMCB1is6months(i.e.0.5

year)fromtheRestructuringEfectiveDate.SuchtermtomaturityoftheMCB1

falsbelowthelowerboundofthetermtomaturityoftheComparableMCBs.

AcordingtotheprincipaltermsoftheMCBs,theMCB1wilcomprisenoles

than75%oftheRestructuringConsiderationand,ifnoneoftheSchemeCreditors

wilelectforMCB2,altheSchemeCreditorswilreceiveMCB1bydefault.

TheGroupcompletedtheofshoredebtrestructuring(the“Previous

Restructuring”)in2023,whichinvolvedCompany’seniornotesandother

ofshoreinstrumentsordebtsintheprincipalamountofUS$9,048milion.Wenote

thathePreviousRestructuringinvolvedtheisueofconvertiblebondsand

mandatoryconvertiblebonds(colectivelythe“PreviousBonds”)withtermto

maturityrangedfrom5yearsto9years.Wefurtherunderstandfromthe

Managementhat(i)theRestructuringisthesecondroundofofshoredebt

restructuringconductedbytheCompanyduringtheMCBReviewPeriodwherethe

PreviousBondsalreadyhadtheirowntermtomaturityandthesePreviousBonds

whichformpartoftheExistingDebtwilbesubjectotheRestructuring;and(i)

theterms(includingthetermtomaturity)oftheMCBsweredeterminedafterarms’

lengthnegotiationsbetwentheCompanyandtheInitialConsentingCreditorsafter

takingintoacount,amongotherthings,theasesmentofaceptabilityofScheme

Creditorstowardstheterms(includingthetermtomaturity)oftheRestructuring

withaviewtoachievingasustainablecapitalstructure.Havingconsideredthe

above,inparticular,(i)underthePreviousRestructuring,thethenrelevantdebts

hadalreadybenextendedin2023throughtheisueofthePreviousBondswith

theirowntermtomaturity(the“FirstDebtExtension”);(i)whenasesingthe

termtomaturityoftheMCB1andMCB2,therelevantperiodoftheFirstDebt

ExtensionandtheasesmentofaceptabilityofSchemeCreditorstowardsthe

terms(includingthetermtomaturity)oftheRestructuringshouldalsobetaken

intoconsideration;and(i)thesonertheMCB1areconverted,thefasterthe

Groupisde-leveragedandcapitalstructureoftheCompanyisoptimised,weareof

theviewthathetermstomaturityoftheMCBsarejustifiable.

MCBConversionPrices

AshowninTable3above,wenotethatheconversionpriceto:(i)theclosing

priceonthelastradingdaypriorto/ondateofanouncementordateofthe

credit/restructuringsuportingagrementordateoftheamended

credit/restructuringsuportingagrementinrelationtotherespectiveComparable

MCBsrangedfromapremiumofaproximately4,438.67%toadiscountof

aproximately44.07%,withanaveragepremiumofaproximately2,033.81%;and

(i)theaverageclosingpriceofthelastfive(5)tradingdayspriorto/ondateofthe

anouncementordateofthecredit/restructuringsuportingagrementordateof

theamendedcredit/restructuringsuportingagrementinrelationtotherespective

ComparableMCBsrangedfromapremiumofaproximately4,475.27%toa

discountofaproximately42.61%,withanaveragepremiumofaproximately

2,082.56%.TheMCB1ConversionPriceandMCB2ConversionPriceare:(a)ata

premiumofaproximately330.38%andaproximately143.67%overtheRSA

ClosingPrice,respectively;and(b)atapremiumofaproximately347.96%and

aproximately153.62%overtheAverageClosingPrice,respectively(colectively

the“MCBsPremiums”).ThepremiumsasrepresentedbytheMCBConversion

Pricesarewithintherespectiverangesandbelowtherespectiveaveragepremiums

oftheComparableMCBs.Havingtakenintoacounthat:(i)theRestructuringis

thesecondroundofofshoredebtrestructuringconductedbytheCompanyduring

theMCBReviewPeriod;(i)underthePreviousRestructuring,thethenrelevant

debtshadalreadybensubjectotheFirstDebtExtension;(i)theconversion

pricesofmandateconvertiblebondsofthePreviousBondsover(a)theclosing

priceoftheSharesonthelastradingdaypriorto;and(b)theaverageclosingprice

oftheSharesofive(5)tradingdaysuptoandincludingthesigningofthe

corespondingrestructuringsuportagrementrepresentediscountsof

aproximately14.89%topremiumsofaproximately31.00%,whichwere

significantlybelowtheMCBsPremiums;and(iv)theterms(includingtheMCB

ConversionPrices)oftheMCBsweredeterminedafterarms’lengthnegotiations

betwentheCompanyandtheInitialConsentingCreditorsaftertakinginto

acount,amongotherthings,theasesmentofaceptabilityofSchemeCreditors

towardstheterms(includingtheMCBConversionPrices)oftheRestructuringwith

aviewtoachievingasustainablecapitalstructure,weconsidertheMCB

ConversionPricesarejustifiable.

Basedontheabove,weconsiderthetermsoftheMCBstobefairand

reasonableandintheinterestsoftheCompanyandtheShareholdersasawhole.

RelativeDilutionefect

Therelativedilutionefectothexistingpublicshareholders(excluding

mandatoryconvertiblebondholderswhoareconsideredaspublic)ofthe

ComparableMCBsrangedfromaproximately23.93%toaproximately81.76%

withtheaveragerelativedilutionefectofaproximately50.82%.

BasedontheinformationdisclosedintheLeterfromtheBoardandas

advisedbytheManagement,thetablebelowilustratesefectsontheshareholding

structureoftheCompanytakingintoacountheimpactoftheMCBIsue.

(i)asatheLatestPracticableDate;and

(i)asumingfulconversionoftheMCBsatheinitialMCB1Conversion

PriceofHK$6.80perShareortheinitialMCB2ConversionPriceof

HK$3.85perShare(asaplicable),and(i)theprincipalamountofthe

MCB1tobeisuedasRestructuringConsiderationwouldbequalto

US$7,237,500,000.00,representing75%ofMaximumScheme

Creditors’Claims,andtheprincipalamountoftheMCB2tobeisued

wouldbequaltoaproximatelyUS$2,412,500,000.00,representing

25%oftheMaximumSchemeCreditors’Claims,(i)Sunac

Internationaland/orMr.Sunand/orhisdesignatedperson(s)wilin

agregatebeisuedMCBsinmaximumprincipalamountof

US$2,231,675,286.20intheRestructuring,comprising(1)theMCBsin

principalamountofuptoUS$15,812,060.00tobeisuedtoSunac

InternationalasaSchemeCreditorand(2)theMCBsinprincipal

amountofuptoUS$2,215,863,226.20tobeisuedtoMr.Sunorhis

designatedperson(s)undertheShareholdingStructureStability

Arangement,and(i)forthepurposeofthepaymentofConsentFes,

MCB1inprincipalamountofUS$60,670,612.75wilbeisuedtothe

SchemeCreditors;

(i)asumingthereisnotherchangeintheisuedsharecapitalofthe

CompanyfromtheLatestPracticableDateuptothedateoftheful

conversionoftheMCBsandbasedontheagredexchangerateofUS$1

=HK$7.8(colectively,the“RelativeDilutionEfectAsumptions”):

Table4:ShareholdingstructureoftheCompanyuponfulconversionof

theMCBs

Asathe

LatestPracticableDate

Imediatelyupon

fulconversionoftheMCBs

basedontheRelativeDilution

EfectAsumptions

NumberofShares%NumberofShares%

Mr.Sun(Note1)2,741,756,98723.90%5,791,983,14823.42%

Mr.WangMengde17,177,0000.15%17,177,0000.07%

Ms.MaZhixia3,829,0000.03%3,829,0000.02%

Mr.TianQiang6,982,0000.06%6,982,0000.03%

Mr.HuangShuping5,400,0000.05%5,400,0000.02%

Mr.SunKevinZheyi261,0000.002%261,0000.001%

HoldersofMCB1(otherthan

SunacInternational,Mr.Sunor

hisdesignatedperson(s)–6,451,533,87526.09%

HoldersofMCB2(otherthan

SunacInternational,Mr.Sunor

hisdesignatedperson(s)–3,757,333,29615.19%

OtherShareholders

(the“OtherShareholders”)(Note2)8,694,437,55675.80%8,694,437,55635.16%

Total11,469,843,543100.00%24,728,936,875100.00%

Notes:

1.Ofthese2,741,756,987Shares,(a)19,930,000ShareswereheldbyMr.Sun,(b)

2,673,120,987ShareswereheldbySunacInternationaland(c)48,706,000Shareswere

heldbyTianjinBiaodi.70%oftheisuedsharesofSunacInternationalandaltheshares

ofTianjinBiaodiwereheldbySunacHoldingsLC.AlisuedsharesofSunacHoldings

LCwereheldbytheHBSFamilyTrust(the“FamilyTrust”).SouthDakotaTrust

CompanyLCwasthetrusteoftheFamilyTrust.TheFamilyTrustwasestablishedby

Mr.SunandMr.Sunandsomeofhisfamilymembersarethebeneficiaries.Inacordance

withtheSFO,Mr.SunwasdemedtobeinterestedintheaforesaidShares.

2.TothebestoftheDirectors’knowledge,informationandbelief,aloftheseShareholders

aremembersofthepublicasdefinedinRule8.24oftheListingRulesasatheLatest

PracticableDate.

AsilustratedinTable4,basedontheRelativeDilutionEfectAsumptions

anduponfulconversionoftheMCBs,theshareholdinginterestsoftheOther

Shareholderswouldbeaproximately35.16%andthecorespondingrelative

dilutionefectwouldbeaproximately53.62%(the“RelativeMCBsDilution”),

whichiswithintherangeandslightlyabovetheaveragerelativedilutionefectof

theComparableMCBsof50.82%.WeunderstandfromtheManagementhatsuch

substantialRelativeMCBsDilutionwasmainlyatributabletothesignificantsize

oftheisueofSharespursuantothefulconversionoftheMCBspursuantothe

RestructuringascomparedtothesizeoftheisuedSharesasatheLatest

PracticableDate.Havingconsideredthat,(i)thesubstantialamountofthecurent

borowingsoftheGroupofaproximatelyRMB105.80bilionasat31December

2024,whicharedueonorbefore31December2025;(i)thesubstantialamountof

theOverdueandEarlyRepaymentBorowings,withthepresingnedtomove

forwardtoachievetheKeyRestructuringObjectives;(i)thepremiumsas

representedbytheMCBConversionPricesarewithintherespectiverangesofthe

ComparableMCBs;and(iv)theCompanyisfacingpresureonitsworkingcapital

andliquiditypositions,asdiscusedintheparagrapheaded“1.1TheGroup”

underthesectionheaded“1.InformationoftheParties”above,weconsiderthathe

RelativeMCBsDilutionisfairandreasonable.

4.5TheShareholdingStructureStabilityArangement

AsdisclosedintheLeterfromtheBoard,to1)maintainastableshareholding

structure,2)ensurethecontinuedcontributionofMr.SuntotheGroup’songoinghome

deliveryprogram,debtriskresolutionandlong-termbusinesrecovery,and3)

strengthenstakeholderconfidenceandbeterfacilitateresourceintegration(the

“StabilityArangementObjectives”),conditionalRestrictedSharesareproposedtobe

alocatedtotheSubstantialShareholderorhisdesignatedperson(s)aspartofthe

Restructuring.ThiswouldenableMr.Sunand/orhisdesignatedpersonstoretaina

certainshareholdinglevel.Specificaly,foreveryUS$100inprincipalamountofMCBs

atributabletotheSchemeCreditors(otherthanthoseatributabletoSunac

International),US$23outofthoseMCBs(i.e.theRelevantNewMCBs)wilinsteadbe

isuedtoMr.SunortheDesigne(s).

OnthebasisoftheMaximumSchemeCreditors’Claims,itisestimatedthatMr.

Sunand/orhisDesigne(s)maybeisuedaditionalMCBsinprincipalamountofupto

US$2,215,863,226.20asaresultoftheShareholdingStructureStabilityArangement.

InconectionwiththeShareholdingStructureStabilityArangement,Mr.Sunwil

executetheChairmanUndertakingpursuantowhichewilirevocablyundertaketo

theCompanythat,amongothers:

a.Mr.Sunwilnot,andwilprocurethathisDesigne(s)donot,sel,asign,

transfer,pledgeorotherwisedisposeoforcreateanyencumbranceoveranyof

theconversionsharestobeisueduponconversionoftheRelevantNew

MCBs(the“RelevantMCBConversionShares”)(eacha“Transaction”),

unles:

i.atanytimeduringtheperiodfrom(andincluding)theRestructuring

EfectiveDatetoand(excluding)thedatethatisthesixthaniversaryof

theRestructuringEfectiveDate(the“RestrictedPeriod”),theaverage

closingpriceperShareasquotedonthedailyquotationshetsofthe

StockExchangeforanyperiodof30consecutivetradingdaysreachesor

excedsHK$7.4perShare(the“MinimumPrice”);or

i.theTransactionocursonorafterthedatethatisthesixthaniversaryof

theRestructuringEfectiveDate,

and,ineithercase,subjectfurthertotheconditionsthat:

i.theTransactionmustcomplywithalaplicablelawsandregulations,

including(withoutlimitation)theListingRules;

iv.asathedatethatis:(x)thesixthaniversaryoftheRestructuring

EfectiveDate;or(y)ifsub-paragraph(a)(i)aboveaplies,thedateof

therelevantTransaction,Mr.Sunshalremain,or(ifMr.Sunis

restrictedbylaworbyanyorderordirectiveofagovernmentagency

fromholdingaseniorpositionatheCompany)oneofhisafiliateshal

remain,employedorengagedasthechairmanoramemberoftheBoard

and/orinanotherseniormanagerialpositionatheCompany(the

“QualificationCondition”),savethat:

A.wheretheStrategicInvestor(ifany)hasrequiredtheresignationof

Mr.Sunandhisafiliatesasaconditionforitsequityinvestmentin,

orgeneralorpartialtakeoverof,theCompany,then(without

prejudicetorderogationfromtherequirementsetoutin

sub-paragraphs(a)(i)and(a)(i)above)theQualificationCondition

shalceasetoaply;and

B.inthecaseofMr.Sun’sdeathordisabilitypriortothedatethatis

thesixthaniversaryoftheRestructuringEfectiveDate,the

QualificationConditionshalceasetoaply,andthepersonwho

inheritsorotherwiselegalyasumesownershiporcontrolofhis

rightsinortitletotheRelevantMCBConversionShareshalbe

permitedtoenterintoneormoreTransactionsinrespectofthose

RelevantMCBConversionSharesonandfromthedatethatisthe

sixthaniversaryoftheRestructuringEfectiveDate;

andif,atasthedatethatisthesixthaniversaryoftheRestructuringEfective

Date,theQualificationConditionapliesbutisnotsatisfied,then,subjecto

compliancewithalaplicablelawsandregulations,including(without

limitation)theListingRules,theRelevantMCBConversionShareshal,

fromthatdateonwards,beheldtotheorderoftheCompanyandMr.Sunand

theDesigne(s)andtheirespectivepermitedtransfere(s)(asaplicable)

shalthereafterceasetohaveanybeneficialinterestinsuchRelevantMCB

ConversionShares;and

b.beforetheconversionoftheRelevantNewMCBsinacordancewiththe

provisionsoftheMCBs,Mr.Sunwilnot,andwilprocurethathis

Designe(s)donot,sel,asign,transfer,pledgeorotherwisedisposeofor

createanyencumbranceoveranyoftheRelevantNewMCBs.

Fortheavoidanceofdoubt,nothingintheChairmanUndertakingshalrestrictMr.

Sun,hisDesigne(s)ortheirespectivepermitedtransfere(s)(asaplicable)from

exercisingtheconversionrightatachingtotheRelevantNewMCBsinacordance

withtheprovisionsoftheMCBs.Inadition,fortheavoidanceofdoubt,

notwithstandinganythingtothecontraryintheChairmanUndertaking,Mr.Sun,

hisDesigne(s)andtheirespectivepermitedtransfere(s)(asaplicable)shalbe

entitledtoexerciseandenjoyalvotingrightsandividendrightsatachedtothe

RelevantMCBConversionSharesupontheirisuancetoMr.Sun,hisDesigne(s)

ortheirespectivepermitedtransfere(s)(asaplicable)folowingconversionof

theRelevantNewMCBs.

TheaboveshalnotrestrictheabilityofMr.SunoranyofhisDesigne(s)to

transfersomeoraloftheRelevantNewMCBsand/ortheconversionshares

isuablethereundertoMr.Sun’safiliate(s),providedthat,amongothers,such

afiliate(s)shal,asaconditionprecedentoreceivesuchRelevantNewMCBs

and/orconversionshares,agretothetermsetoutintheChairmanUndertakingas

ifitwereapartytotheChairmanUndertaking.

TheMinimumPriceandtheperiodof30consecutivetradingdaysweredetermined

afterarms’lengthnegotiationsbetwentheCompanyandtheInitialConsenting

Creditorsaftertakingintoacount,amongotherthings:

1.thefectiveMCBConversionPrice(calculatedby

1/(0.75/6.8+0.25/3.85)/77%);

ToariveatsuchefectiveMCBConversionPrice,ithasbenasumedthat

theprincipalamountoftheMCB1tobeisuedwouldrepresentheagregate

of75%oftheSchemeCreditors’ClaimsandtheConsentFes,andthe

principalamountoftheMCB2tobeisuedwouldrepresent25%ofthe

SchemeCreditors’Claims.Inadition,23%oftheMCBs(comprisingMCB1

andMCB2)atributabletotheSchemeCreditorsasRestructuring

ConsiderationwilbeusedfortheShareholdingStructureStability

Arangement.ThefectiveMCBConversionPriceonlytakesintoacount

theportionofMCBthatheSchemeCreditorsareactualyisued,hencethe

MCBConversionPriceisdividedby77%toariveathefectiveMCB

ConversionPrice.

2.thesharepriceperformanceoftheCompany;

3.theasesmentofaceptabilityofSchemeCreditorstowardsthetermsofthe

Restructuringwithaviewtoachievingasustainablecapitalstructure;and

4.thepurposeoftheShareholdingStructureStabilityArangemento

incentivizeMr.SuntocontributetowardstheGroup’slong-termbusines

recoveryandunlockvaluefortheCompanyanditstakeholdersasawhole.

ThekeyobservationswenotefromsalientermsoftheChairmanUndertakingare:

(i)theRestrictedPeriodofsixyearsisubstantialylongerthanthetermtomaturityof

MCB1andMCB2of6monthsand30months,respectively;(i)theMinimumPrice(a)

isubstantialyhigherthanandrepresentspremiumsofaproximately368.35%and

92.20%,respectively,overtheRSAClosingPriceandtheMCB2ConversionPrice;and

(b)representsapremiumofaproximately8.8%overtheMCB1ConversionPrice;(i)

Mr.SunandtheDesigne(s),whencaryingoutanyTransaction(s),wilbesubjectothe

QualificationConditionthatheoroneofhisafiliateshalremain,employedor

engagedasthechairmanoramemberoftheBoardand/orinanotherseniormanagerial

positionatheCompanyasathedatethatis:(x)thesixthaniversaryofthe

RestructuringEfectiveDate;or(y)iftheTransactioniscariedoutpriortothatdate

wheretherelevantconditionsaremet(i.e.inthescenariosetoutinsub-paragraph(a)(i)

above),thedateoftherelevantTransaction;(iv)if,atasthedatethatisthesixth

aniversaryoftheRestructuringEfectiveDate,theQualificationConditionapliesbut

isnotsatisfied,then,subjectocompliancewithalaplicablelawsandregulations,

including(withoutlimitation)theListingRules,theRelevantConversionShareshal,

fromthatdateonwards,beheldtotheorderoftheCompany;(v)Mr.Sunandthe

Designe(s)wilnotbepermitedtosel,asign,transfer,pledgeorotherwisedisposeof

orcreateanyencumbranceoveranyoftheRelevantNewMCBs,beforetheconversionof

theRelevantNewMCBsinacordancewiththeprovisionsoftheMCBs;(vi)Mr.Sun

andtheDesigne(s)canonlysel,asign,transfer,pledgeorotherwisedisposeofor

createanyencumbranceoveranyoftheRelevantMCBConversionSharesonorafterthe

datethatisthesixthaniversaryoftheRestructuringEfectiveDate,ortheaverage

closingpriceperShareasquotedonthedailyquotationshetsoftheStockExchangefor

anyperiodof30consecutivetradingdays(the“30DayObservationPeriod”)reachesor

excedstheMinimumPriceofHK$7.4perSharesubjectotheconditionsinthe

ChairmanUndertakingbeingsatisfied(the“RestrictiveMechanismsofthe

ShareholdingStructureStabilityArangement”).

OurexpandedcomentaryontwofthesalientermsundertheRestrictive

MechanismsoftheShareholdingStructureStabilityArangement,notablytheMinimum

PriceofHK$7.4perShareandthe30DayObservationPeriodof30consecutivetrading

days,areasfolows.WenotethatheMinimumPriceofHK$7.4perShareisahigh

ceilingcomparedtotheprevailingmarketpricesoftheShares,thatitrepresentsa

premiumofaproximately368.35%overtheRSAClosingPriceofHK$1.58perShare

andnoneoftheclosingSharepricesclosedabovetheMinimumPriceduringtheReview

Period.TheMinimumPricehoversaboveventhehighestclosingSharepriceduringthe

ReviewPeriodofHK$4.60perShareon2October2024.Inlightoftheabove,we

consideritprudentosetheMinimumPriceatHK$7.4perSharetolimitMr.Sun’s

Sharedisposalactivitiesduringtherelevantlock-uperiod.Regardingthe30Day

ObservationPeriod,wenotethat30consecutivetradingdaysisoneofthemediumterm

timeperiodscomonlyadoptedbythemarketinasesingtermsoftransactionsrelating

tosharepricesoflistedcompanies.Suchkindofmovingaverageover30tradingdaysis

consideredagodindicatorthathelpstosmothenoutheimpactofdailydynamicups

andownsinshareprices,alsoreferedtoasthe‘noise’ofpriceactionwhileitdoesnot

createlagefectscomonlyfoundinlongertermovingaverages.Basedontheabove,

weareoftheviewthathe30DayObservationPeriodisinlinewithmarketpracticeto

smothenoutdailynoiseoftheSharepriceswhichwouldensureMr.Suncanonlybe

releasedfromthelockupaftertheSharepricehasbenabletosustainabovethe

MinimumPricethroughouthe30DayObservationPeriod,beingareasonablylong

periodoftime,sothathewouldnotbereleaseduetoshortermfluctuationsofthe

Shareprices.

ToachievetheStabilityArangementObjectives,conditionalRestrictedSharesare

proposedtobealocatedtotheSubstantialShareholderaspartoftheRestructuring.

BasedontheShareholdingStructureStabilityArangementandourdiscusionwiththe

Management,weunderstandthat(i)theRelevantNewMCBswilbentirelyathecosts

oftheSchemeCreditors;and(i)theShareholdingStructureStabilityArangement

wouldnothaveanyaditionalimpactontherelativedilutionefectoftheMCBIsue

giventhatuponthefulconversionoftheMCBsbasedontheRelativeDilutionEfect

Asumptions,theresultingshareholdinginterestsoftheOtherShareholdersandthe

RelativeMCBsDilutionwouldremainthesame.AcordingtotheManagement,asat17

April2025,theInitialConsentingCreditorsholdingaproximatelyUS$1.3bilionin

agregateprincipalamountofdebthavesignedtheRSA.Asetoutintheanouncement

oftheCompanydated24June2025,asathedateofsuchanouncement,Consenting

Creditorsholdingaproximately75%oftheagregateoutstandingprincipalamountof

theExistingDebthaveacededtotheRSA.

AcordingtotheManagement,undertheleadershipofMr.Sun,theGroup(i)has

alwaysmadeguarantedhomedeliveryasitsprimaryoperationalobjective,actively

respondingtothegovernment’srequirementforguarantedhomedelivery;and(i)

proactivelyadresdebtrisksoftheGroupwithmarkedprogres.Asdisclosedinthe

2024AnualReport,theGroupcompletedthedeliveryofaproximately170,000houses

in84citiesin2024byunremitingeforts,rankingamongtheindustryleaders.During

2022to2024,theGrouphascumulativelydeliveredaproximately668,000houses.In

2025,theGrouplanstosparenoefortodeliverhouses,substantialycompleting

guarantedhomedeliverytasks.Ontheotherhand,theGroupcompletedthePrevious

Restructuringin2023anditsucesrelievedtheCompany’sdebtrepaymentpresure

andgreatlyoptimizedtheCompany’scapitalstructureasat31December2023.In2024,

giventhemarketrecoveryfelsignificantlyshortofexpectations,theGroupdevelopeda

comprehensivemarket-drivenrestructuringplanforonshorepublicmarketdebtstailored

toitspecificircumstancesandwasuportedbymultipleparties.Asathedateofthe

2024AnualReport,theonshorepublicmarketdebtsrestructuringplanshavealben

consideredandaprovedatherelevantmetingsofbondholders.On17April2025,the

GroupanouncedandproposedtoimplementRestructuringsoastoprovideafairand

equitablesolutionthatmaximizesrecoveryforcreditors,whilepreservingtheGroup’s

abilitytoperateasagoingconcernandcreatingawin-winoutcomeforal

stakeholders.

Inadition,theManagementisoftheviewthatshareholdingofMr.Suninthe

CompanywouldbesubstantialydilutedaftertheRestructuringasumingthereisno

ShareholdingStructureStabilityArangement,whileitiscriticaltomaintainastable

shareholdingstructuresoastostrengthenstakeholderconfidenceandforthelong-term

recoveryofthebusinesoftheGroup.AsdisclosedinthecircularoftheCompanydated

13June2023inrelationtothePreviousRestructuring(the“PreviousRestructuring

Circular”),Mr.Sundirectlyandindirectlycontroled,throughcertaincorporations

(includingSunacInternational)andinhisindividualcapacity,inaproximately38.75%

oftheisuedSharesasat9June2023,beingthelatestpracticabledateofthePrevious

RestructuringCircular.AsatheLatestPracticableDate,Mr.Sundirectlyandindirectly

controled,throughcertaincorporations(includingSunacInternational)andinhis

individualcapacity,anagregateofaproximately23.90%oftheisuedShares.With

theShareholdingStructureStabilityArangementandimediatelyuponfulconversion

oftheMCBsbasedontheRelativeDilutionEfectAsumptions,theshareholdingtobe

heldandemedtobeinterestedbyMr.SunintheCompanywouldbeaproximately

23.42%.WithoutheShareholdingStructureStabilityArangementandimediately

uponfulconversionoftheMCBsbasedontheRelativeDilutionEfectAsumptions,

theshareholdingheldandemedtobeinterestedbyMr.SunintheCompanywouldfal

toaproximately11.17%.AsexplainedbytheManagement,suchsubstantialdilutionto

Mr.Sun’shareholdingintheCompany,intheabsenceoftheShareholdingStructure

StabilityArangement,wouldbeunfavorabletothestabilityoftheshareholding

structureoftheCompany.TheShareholdingStructureStabilityArangementseksto

maintainastableshareholdingstructureandensurethecontinuedcontributionofMr.

SuntotheGroup’songoinghomedeliveryprogram,debtriskresolutionandlong-term

businesrecoveryandstrengthenstakeholderconfidenceandbeterfacilitateresource

integration.TheShareholdingStructureStabilityArangementcanenhancethe

alignmentoftheinterestsoftheCompany,theSchemeCreditors,theShareholdersand

Mr.Sun.

Inlightoftheaboveandhavingconsideredthat(i)theRelevantNewMCBswilbe

entirelyathecostsoftheSchemeCreditorsandtheShareholdingStructureStability

Arangementwouldnothaveanyaditionalimpactontherelativedilutionefectofthe

MCBIsuegiventhatuponthefulconversionoftheMCBsbasedontheRelative

DilutionEfectAsumptions,theresultingshareholdinginterestsoftheOther

ShareholdersandtheRelativeMCBsDilutionwouldremainthesame;(i)Mr.Sunhas

heldaparamountandleadingroleintheGroup’shomedelivery,debtrestructuringsand

long-termbusinesrecoveryprograms;and(i)ourobservationandapraisalofthe

RestrictiveMechanismsoftheShareholdingStructureStabilityArangement,weareof

theviewthatheShareholdingStructureStabilityArangementisjustifiableandisinthe

interestsoftheCompanyandtheShareholdersasawhole.

OPINIONANDRECOMENDATION

Havingconsideredtheabovementionedprincipalfactorsandreasons,inparticular:

(i)theGrouprecordedconsecutivelosesatributabletotheownersoftheCompany

forFY2021,FY2022,FY2023andFY2024,withnetcurentliabilitypositionof

aproximatelyRMB53.52bilionasat31December2024;

(i)thecurentborowingsoftheGroupasat31December2024ofRMB186.09bilion

areduewithinoneyearandthesubstantialamountoftheOverdueandEarly

Repayment,withthepresingnedtomoveforwardtoachievetheKey

RestructuringObjectives;

(i)acordingtothe2024AnualReporthat,theBoardhaspreparedtheconsolidated

financialstatementsoftheGroupasat31December2024onagoingconcernbasis

andBDOhasgivenDisclaimerofOpinionontheconsolidatedfinancialstatements

oftheGroupforFY2024;

(iv)togetherwiththePetition,theCompanyisfacingpresureonitsworkingcapital

andliquiditypositionsandtheRestructuringiscrucialfortheGrouptoachievea

sustainablecapitalstructurewithsubstantialyreducedofshoredebtsand

insolvencyrisksandstableoperatingenvironmentosuportitslong-termbusines

recovery;

(v)thepremiumsoftheMCB1ConversionPriceandMCB2ConversionPriceof

aproximately330.38%andaproximately143.67%overtheRSAClosingPrice;

(vi)theMCB1ConversionPriceisignificantlyabovetherangeoftheShareclosing

pricesthroughoutheReviewPeriodandtheMCB2ConversionPriceisonly

slightlybelowtheuperboundoftheShareclosingpricesduringtheReview

Period;

(vi)basedontheanalysisetoutabove,weconsiderthetermsoftheMCBstobefair

andreasonableandintheinterestsoftheCompanyandtheShareholdersasa

whole;

01918 融创中国展示文件：(b) 独立财务顾问函件

To: The Independent Board Comite and the Independent Shareholders of Sunac China

Capitalhasnot:(i)actedinthecapacityasafinancialadviserorasanindependentfinancial

1.InformationoftheParties

Source:the2024AnualReport

Source:the2024AnualReport

2.ReasonsforandbenefitsoftheConectedMCBIsue

3.PrincipaltermsoftheMCBs

Isuer:TheCompany

Principalamount:UptoUS$9,710,670,612.75(beingthesumof100%ofthe

Isuedate:RestructuringEfectiveDate

Maturity:InrespectofMCB1,thedatefalingsixmonthsfromthe

Interest:TheMCBsarenotinterestbearing.

Shares:

Conversionprice:MCB1

Adjustmentevents:SubjectothetermsoftheMCBs,eachoftheMCB1

Where:

Where:

Sharestobeisued:

Securityandguarante:TheMCBswilbesecuredbythechargesovertheshares

Redemptionevents:(a)RedemptionatheoptionoftheCompany

Redemptionrestriction:TheCompanymayredemorepurchasetheoutstanding

Ranking:TheMCBsconstitutedirect,unsubordinated,unconditional

Votingrights:Theholder(s)oftheMCBshalnothaveanyrighto

Transferability:TheMCBarefrelytransferablesubjectoconditions.

Aplicationforlisting:AnaplicationwilbemadebytheCompanytotheListing

4.EvaluationofthekeytermsoftheConectedMCBIsue

Notes:

1.ConversionpricesofrespectiveComparableMCBsarextractedfromtherespectivecircularsin

2.ToprovidemeaningfulreferencesforelativedilutionefectcausedbyconversionoftheMCBs,

3.Insteadoftermstomaturity,onlymaturitydatesofthemandatoryconvertiblebondsofKaisa

4.TheprincipalamountoftheMCB1includestheConsentFestobepaidbytheMCB1.

5.Theinformationandfiguresunderthistablewerextractedfromand/orcalculatedbasedonthe

6.Calculatedbasedontheinitialminimumconversionpriceoftherespectivemandatory

7.Calculatedbasedontheinitialconversionpriceoftherespectivemandatoryconvertiblebondsof

8.TherelativedilutionefectoftheMCBsiscalculatedbasedontheasumptionsandshareholding

Notes:

1.Ofthese2,741,756,987Shares,(a)19,930,000ShareswereheldbyMr.Sun,(b)

2.TothebestoftheDirectors’knowledge,informationandbelief,aloftheseShareholders

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