Amendments to terms of convertible redeemable unsecured debentures of Sunwah International Limited

HONG KONG, Dec. 10, 2013 /CNW/ - Dr. Jonathan Koon Shum Choi ("Dr. Choi") of Hong Kong, China announces that the terms of the convertible redeemable unsecured debentures of Sunwah International Limited (the "Corporation") for a principal amount of $4,500,000 (the "Debentures") held by Sun Wah Capital Limited (a corporation controlled by Dr. Choi) have been amended by the Corporation resulting in additional common shares of the Corporation (the "Shares") becoming issuable to the debenture holders (the "acquisition").

On December 6, 2013, disinterested shareholders of the Corporation approved the Shares issuable based upon the amended terms and conditions of the Debentures to as follows: (a) the Debentures bear an interest rate equal to 8% per annum (increased from 1% per annum); (b) the Debentures are convertible at the holder's option into Shares at the conversion price of $0.48 per Share (reduced from $0.55 per Share); (c) an arrangement fee equal to 1% of the aggregate principal amount on the Debentures will be payable on the maturity date, or such earlier date in the event of any full conversion or full redemption of the Debentures; (d) the Debentures are redeemable at the Corporation's option into Shares at the redemption price of $0.48 per Share (reduced from $0.55 per Share) if the 20-day volume weighted average price of the Shares listed on the Toronto Stock Exchange (the "TSX") exceeds $0.96 per Share (reduced from $1.10 per Share) and if the daily trading volume of Shares in each of the previous 20 consecutive trading days prior to the redemption date equal or exceed 10% of the aggregate number of Shares to be issued upon redemption of the principal amount (together with accrued and unpaid interest) on a cumulative basis, then the Corporation may satisfy its obligation to make the redemption payment by delivering that number of Shares equal to the amount due divided by $0.48 per Share (reduced from $0.55 per Share) and that number of Shares equal to the accrued interest thereon divided by: (i) $0.48 per Share (reduced from $0.55per Share), if the market price of the Shares at the time of redemption is equal to or less than $0.60 per Share (reduced from $0.69 per Share), or (ii) by the market price immediate prior to the redemption date less the maximum discount allowed by the TSX if the market price of the Shares exceeds $0.60 per Share (reduced from $0.69 per Share); and (d) the maturity date is September 19, 2014 (extended by one year from September 19, 2013).

The original distribution of the Debentures to Sun Wah Capital Limited was exempt from prospectus and registration requirements pursuant to exemptions including the exemption set out in BC Instrument 72-503 - Distribution of Securities Outside British Columbia.

Prior to the proposed acquisition, Dr. Choi beneficially held, directly and indirectly, 61,697,310 Shares, representing approximately 66.80% of the outstanding Shares.  Of the 61,697,310 Shares, 36,966,159 Shares are held by Sun Wah Capital Limited and 14,078,055 Shares are held by Scarlet Red Limited.  Dr. Choi controls both Sun Wah Capital Limited and Scarlet Red Limited.  The remaining 10,653,096 Shares are held directly by Dr. Choi.

Immediately following the acquisition, on a fully-diluted basis, Dr. Choi beneficially holds, directly and indirectly 71,072,310 Shares, representing approximately 69.9% of the then enlarged total issued and outstanding Shares. Upon any redemption by the Corporation, Dr. Choi may control a maximum 71,447,310 Shares (including principal and maximum interest both payable in Shares) representing approximately 70% of the then enlarged total issued and outstanding Shares. After such acquisition, Dr. Choi would remain the largest controlling shareholder of the Corporation and there would be no effect on the control of the Corporation.

Mr. Michael Koon Ming Choi ("Mr. Choi"), who is related to Dr. Choi and is a director of the Corporation, holds Debentures with a principal amount of $1,500,000.  Mr. Choi currently beneficially owns or controls 118,937 Shares and immediately following the acquisition, assuming full conversion of only the Debentures held by him, Mr. Choi will beneficially own 3,243,937 Shares, representing approximately 3.4% of the then enlarged total issued and outstanding Shares. Upon any redemption by the Corporation, Mr. Choi may control a maximum 3,368,937 Shares (including principal and maximum interest both payable in Shares) representing approximately 3.5% of the then enlarged total issued and outstanding Shares.

Immediately following the acquisition and assuming full conversion of only the Debentures owned or controlled by Dr. Choi together with Mr. Choi, they are expected to beneficially own or control, directly and indirectly, 74,316,247 Shares representing approximately 70.9% of the then enlarged total issued and outstanding Shares. After such acquisition, Dr. Choi would remain the largest controlling shareholder of the Corporation and there would be no effect on the control of the Corporation.

Dr. Choi beneficially acquired the Debentures for investment purposes.  In pursuing such purposes, Dr. Choi takes a long-term view of the investment.  Dr. Choi reserves the right to formulate other plans or make other proposals, and take such actions with respect to his investment in the Corporation.  Dr. Choi may at any time reconsider and change his plans or proposals relating to the foregoing.

This press release is issued pursuant to National Instrument 62-103 - The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, which also require a report to be filed with regulatory authorities in each of the jurisdictions containing additional information with respect to the foregoing matters (the "Early Warning Report").  A copy of the Early Warning Report will appear with the Corporation's documents on the SEDAR website, at www.sedar.com.  A copy of the Early Warning Report may also be obtained by contacting Ms. Joey Koh at [phone].

SOURCE: Sunwah International Limited

Kristen Humphrey, Sunwah International Group, [phone], [email protected]