ADAM.L Regulatory News (ADAM)

Adamas Finance Asia Limited

("ADAM", the "Company" or the "Group")

RESTRUCTURING OF INVESTMENT IN FORTEL TECHNOLOGY HOLDINGS LIMITED

The Directors of ADAM are pleased to announce that as a result of a restructuring the Company's indirect 33.6% shareholding in Fortel Technology Holdings Limited ("FTH") has been converted into a US$11.3 million interest-bearing loan. The conversion represents a step in the Company's long-term strategy to convert its legacy portfolio into income-generating assets. As at 30 June 2016 the Group's portfolio was valued at US$110.1 million, with the interest in FTH representing US$11.3 million.

BVI-based FTH previously controlled all of the economic interest in the Fortel IT solutions and services businesses in China, which include the I-Buying e-commerce operation. The restructuring of FTH has been undertaken in preparation for the IPO of I-Buying on the National Equities Exchange and Quotations market in Beijing, China (the "Restructuring").

The Restructuring involved an intra-group transfer of the Fortel IT solutions and services business to I-Buying as a pre-cursor to I-Buying seeking the IPO. As a result, FTH no longer controls an operating business, and accordingly ADAM has negotiated a new instrument to preserve its economic interest.

Under the Restructuring, HK-based Fortel Solutions Limited ("FSL"), which is a wholly owned subsidiary of FTH, has provided a loan (the "Loan") of RMB119 million (approximately US$18.1 million) to Mr. David Chen and Ms. Zhong Ying Ying (the "Borrowers") who now own 100% of the I-Buying business. ADAM's wholly owned subsidiary, CPE TMT Holdings Limited ("CPE"), has transferred its equity shareholding in FTH to Imperia Capital Investment Holdings Limited ("Imperia"), a major shareholder in FTH. In return, FSL has novated to CPE US$11.3 million worth of the Loan.

The terms of the novated portion of the Loan are that it is repayable after three years and has a coupon of 3% per annum in the first year and 8% per annum thereafter. Duncan Chui who, as a result of the Restructuring, indirectly controls a significant shareholding in FTH, has personally guaranteed the obligations of the Borrowers to the Company in respect of the Loan. The Loan is secured by a share pledge of the 33.6% equity stake in FTH that has been transferred to Imperia.

ADAM Chairman John Croft said: "This restructuring represents a small but significant move in line with our stated objective of positioning the Company to become cash generative with no legacy asset portfolio. It fits with our intended focus on collaterised lending, structured finance and strategic finance."

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