Langham Hospitality Investments andLangham Hospitality Investments Limited

Investor presentation

July 2020

1

Disclaimer (page 1 of 2)

Information contained in this presentation is intended solely for your personal reference and is strictly confidential. The information and opinions in this presentation are subject to change

without notice, its accuracy is not guaranteed and it may not contain all material information concerning Langham Hospitality Investments (the “Trust”) and Langham Hospitality

Investments Limited (the “Company”). Neither LHIL Manager Limited, the trust-manager of the Trust (the “Trustee-Manager”), the Company nor any of their respective affiliates, advisors

and representatives make any representation regarding, and assumes no responsibility or liability whatsoever (in negligence or otherwise) for, the accuracy or completeness of, or any

errors or omissions in, any information contained herein nor for any loss howsoever arising from any use of these materials. By attending or viewing all or part of this presentation, you are

agreeing to maintain confidentiality regarding the information disclosed in this presentation and to be bound by the restrictions set out below. Any failure to comply with these restrictions

may constitute a violation of applicable securities laws.

The information contained in these materials has not been independently verified. No representation or warranty, expressed or implied, is made as to, and no reliance should be placed

on, the fairness, accuracy, completeness or correctness of, the information or opinions contained herein. None of the Trust, the Trustee-Manager, the Company, The Hongkong and

Shanghai Banking Corporation Limited (the “Global Coordinator") nor any of its respective holding companies, subsidiaries, associated undertakings, controlling persons or affiliates, nor

any of their respective directors, officers, partners, employees, agents, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever

arising, whether directly or indirectly, from any use, reliance or distribution of this presentation or its contents or otherwise arising in connection with this presentation. It is not the intention

to provide, and you may not rely on these materials as providing, a complete or comprehensive analysis of the Trust and the Company's financial or trading position or prospects. The

information and opinions contained in these materials are provided as at the date of this presentation and are subject to change without notice. Nothing contained herein or therein is, or

shall be relied upon as, a promise or representation, whether as to the past or the future and no reliance, in whole or in part, should be placed on the fairness, accuracy, completeness or

correctness of the information contained herein. Further, nothing in this document should be construed as constituting legal, business, tax or financial advice. None of the Trust and the

Company, the Global Coordinator or its subsidiaries or affiliates has independently verified, approved or endorsed the material herein.

The information in this presentation may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution or

reproduction of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the United States Securities Act of 1933, as amended

(the “U.S. Securities Act”), or the applicable laws of other jurisdictions.

This presentation contains forward-looking statements that may be identified by their use of words like “plans,” “expects,” “will,” “anticipates,” “believes,” “intends,” “depends,” “projects,”

“estimates” or other words of similar meaning and that involve assumptions, risks and uncertainties. All statements that address expectations or projections about the future and all

statements other than statements of historical facts included in this presentation, including, but not limited to, statements about the strategy for growth, product development, market

position, expenditures, and financial results, are forward-looking statements. Such forward-looking statements are based on certain assumptions and expectations of future events

regarding the Trust and the Company's present and future business strategies and the environment in which the Trust and the Company will operate, and must be read together with

those assumptions. The Trustee-Manager and the Company do not guarantee that these assumptions and expectations are accurate or will be realized. Actual future performance,

outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Although the Trust and

the Company believes that such forward-looking statements are based on reasonable assumptions, it can give no assurance that such expectations will be met. Representative examples

of these risks, uncertainties and assumptions include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition

from other companies, shifts in customer demands, customers and partners, changes in operating expenses including employee wages, benefits and training, governmental and public

policy changes and the continued availability of financing in the amounts and the terms necessary to support future business. Predictions, projections or forecasts of the economy or

economic trends of the markets are not necessarily indicative of the future or likely performance of the Trust and the Company. Past performance is not necessarily indicative of future

performance. The forecast financial performance of the Trust and the Company is not guaranteed. You are cautioned not to place undue reliance on these forward-looking statements,

which are based on the Trust and the Company’s current view of future events. The Trustee-Manager and the Company does not assume any responsibility to amend, modify or revise

any forward-looking statements, on the basis of any subsequent developments, information or events, or otherwise.

2

Disclaimer (page 2 of 2)

This presentation is for information purposes only and does not constitute or form part of an offer, solicitation or invitation of any offer, to buy or subscribe for any securities, nor should it

or any part of it form the basis of, or be relied in any connection with, any contract or commitment whatsoever. Any decision to invest in any securities issued by the Trust and the

Company or its affiliates should not be made on the basis of information contained in this presentation.

The receipt of this document by any recipient is not to be taken as the giving of investment advice by the Trust and the Company, the Global Coordinator or their affiliates to that recipient,

nor to constitute such person a customer or client of the Trust and the Company, the Global Coordinator or their affiliates. Accordingly, none of the Trust and the Company, the Global

Coordinator or their affiliates will be responsible in any manner whatsoever to the recipient for, including but not limited to, providing protections afforded to its customers or clients or

advising the recipient in relation to any potential transaction.

These materials may not be taken or transmitted into any jurisdictions other than Hong Kong and are not for distribution, directly or indirectly, in or into any jurisdictions other than Hong

Kong.

Nothing in this presentation constitutes an offer of securities for sale in Hong Kong, United States or any other jurisdiction where it is unlawful to do so. These materials are not an offer of

securities for sale into any jurisdictions other than Hong Kong. The securities have not been and will not be registered under the U.S. Securities Act or any state securities law in the

United States and may not be offered, sold, pledged or transferred within the United States.

This presentation has not been and will not be registered with any governmental authorities in any jurisdictions.

All capitalised terms used in this presentation (other than the terms defined below) shall have the same meanings as those defined in the announcement of the proposed rights issue

dated 16 July 2020:

“Great Eagle Group” Great Eagle and the Relevant GE Subsidiaries (as defined in the announcement of the proposed rights issue dated 16 July 2020)

“SSUs” Share Stapled Units (as defined in the announcement of the proposed rights issue dated 16 July 2020)

“We” or “us” the Trust Group (as defined in the announcement of the proposed rights issue dated 16 July 2020)

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Rationale for the

Proposed Rights Issue

4

Challenging

environment

The Hong Kong hotel sector has encountered significant headwind since the beginning of 2020 primarily due to

the impact of the COVID-19 pandemic

Overnight visitor arrivals in Hong Kong has decreased by over 90% year-on-year1 to a minimal level

There are no signs that international travel and tourism activities will revert to normal soon:

- As at 16 July 2020, 218 countries and areas had reported infections with a total of approximately 13 million COVID-19 cases reported globally2

- Travel restrictions, quarantine measures and social distancing measures remain in force in many countries across the world

Difficult environment for the hotel sector in Hong Kong

Notes:

1. In February, March, April and May 2020; according to statistics published by the Hong Kong Tourism Board

2. According to statistics published by the Department of Health of the HKSAR Government

1

2

3

We receive a fixed rental income of HKD225 million per annum and a variable rental income equal to 70%

of the Adjusted Gross Operating Income of the hotels held by us

The operating performance of the hotels has declined significantly amid the COVID-19 pandemic. Average

room rate, occupancy and revenue per available room (“RevPAR”) of our hotels this year has decreased

significantly as compared with the corresponding period in the preceding year

While we continue to receive the fixed rental income from the Master Lessee, the weaker underlying

performance of the hotels has led to a decrease in their Adjusted Gross Operating Income and in turn a

decrease in the variable rent receivable by us

Negative

impact on

our income

stream

5

Impact on Loan Agreements and financial covenants

Pursuant to the Loan Agreements, we are required to satisfy certain financial covenants, including

but not limited to maintaining:

- A minimum interest coverage ratio

- A maximum loan to valuation ratio of the hotel properties held by us (the “LTV Ratio”)

As of 16 July 2020, we are in compliance with the provisions under the Loan Agreements. As long as the requirements of

the Mitigation Mechanism are satisfied, the financial covenants will not be considered as breached

We are taking a number of steps in response, including tightening of expense control, deferring various renovation

plans, applying for and receiving COVID-19 subsidies announced from the HKSAR Government and not paying any

interim distribution for the six-month period ending 30 June 2020

We are also paying close attention to our ability to meet the financial covenants, especially the LTV Ratio, as

deterioration that might be prolonged in market conditions and the earnings of our hotels are expected to have a negative

impact on the valuation of our property interests

Financial Covenants

Mitigation Mechanism

If these financial covenants are not met, we are required to undertake Mitigation Mechanism,

including but not limited to:

– Depositing additional cash into an account to be charged to the security agent (to restore the

minimum interest coverage ratio), and/or

– Prepaying part of the outstanding loan (to restore the maximum LTV Ratio)

6

Transaction Structure and

Use of Proceeds

7

Equity financing

Asset disposal

Debt financing

Why a rights issue?

Notes:

1. Except in relation to any dilution resulting from the taking up by third parties of any Rights SSUs arising from the aggregation of fractional entitlements

2. Assuming (i) no Rights SSUs are taken up by the Qualifying Holders other than Great Eagle Group pursuant to the Irrevocable Undertaking and (ii) no excess applications made by Qualifying Holders

Cannot address the issue in relation to the financial covenants

High execution uncertainty in the current market condition

Would not allow Unitholders to participate in the upside from any future business recovery

Amongst various equity fundraising alternatives, the Rights Issue is the best option:

Improves our financial position immediately

Allows all Unitholders (other than Non-Qualifying Holders) to participate and not be diluted

as to their ownership stake in the Trust Group1 if they wish

Potential opportunity to sell the nil-paid rights (for Qualifying Holders who do not wish to

take up their entitlements)

Great Eagle has provided the Irrevocable Undertaking, thereby giving certainty of raising at

least HKD648 million2

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Great Eagle Group has undertaken to take up the number of Rights SSUs under its assured entitlement; it also intends to apply, by

way of excess application, for the maximum number of Rights SSUs allowed under Listing Rules (the number it can take up being

subject to the public float requirement)

Estimated net proceeds: HKD638 million (Scenario B) – HKD1,009 million (Scenario A)

Number of SSUs in issue1 2,145,487,833 SSUs

Rights ratio 1 Rights SSU for every 2 SSUs held on the Record Date

Assuming all Rights SSUs are

taken up

(“Scenario A”)

Assuming (i) No Rights SSUs are

taken up by the Qualifying Holders

other than Great Eagle Group

pursuant to the Irrevocable

Undertaking and (ii) no excess

applications made by Qualifying

Holders (“Scenario B”)

Assuming (i) no Rights SSUs are

taken up by the Qualifying Holders

other than Great Eagle Group

pursuant to the Irrevocable

Undertaking and (ii) excess

application is made by Great Eagle

as adjusted by the Waived Excess

SSUs (“Scenario C”)

Gross proceeds (HKD) c.HKD1,019 million c.HKD648 million c.HKD720 million

Number of Rights SSUs 1,072,743,916 682,411,916 757,534,167

As % of the existing issued SSUs1 50.0% 31.8% 35.3%

As % of the issued SSUs1

(as enlarged by the Rights Issue)33.3% 24.1% 26.1%

Rights subscription price HKD0.95

Theoretical ex-rights price ("TERP") HKD1.05

Discount to TERP 9.5%

Last closing price HKD1.10

Discount to last close price 13.6%

Underwriting Non-underwritten

Key terms of the Rights Issue

Notes:

1. As at the date of the announcement of the Rights Issue (16 July 2020)

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Use of proceeds

Based on the minimum amount of estimated Net Proceeds of HK$638 million as set out in Scenario B:

If additional net proceeds are raised above the minimum amount:

In the case where further Right SSUs are taken up by the Unitholders or excess applications on EAFs are made by the

Qualifying Holders, we will consider utilising such proceeds in prepaying part of the outstanding loans further

under the Loan Agreements.

Notes:

1. Including the settlement of operating, finance and trust level expenses, as well as payment to reserves for furniture, fixtures and equipment and potentially renovation payments

2. Given the uncertainty how the COVID-19 situation may develop, we may utilise more than HK$45 million for the Mitigation Mechanism if the future situation requires. If that happens, the amount for

settlement of finance costs and general working capital will reduce accordingly

3. The release date of the security deposits will depend on our ability to maintain a minimum interest coverage ratio, which in turn is subject to various factors contributing to the operating performance of our

hotel properties. Upon release of the security deposits, taking into account future business outlook and financial performance, we will consider payments in relation to, among others, the renovation of its

hotel properties, settlement of finance costs and general working capital purpose

Key terms of the loans:

Bear interest rate at HIBOR plus 0.83% per annum

Mature in December 2023

Secured by our investment properties

Prepaying part of the

outstanding loans

At least 80%

(i.e. HKD510 million)

Additional security deposits under the Mitigation Mechanism:

Current intention: Approx. HK$45 million2, taking into account the

minimum interest coverage ratio we are required to maintain and

our recent financial performance

For general working capital upon release3

The remainder will be set aside for future settlement of finance costs

and general working capital

In part for additional

security deposits under

the Mitigation

Mechanism

In part for settlement of

finance costs and

general working capital

purpose1

Not more than 20%

(i.e. HKD128 million)

UsageNet Proceeds

10

Key Objectives and

Takeaway

11

Create additional headroom regarding the LTV Ratio and

enhance our ability to satisfy the financial covenants

Key objectives and takeaway

2

Enlarge our equity base, and lower our gearing and interest expenses1

Strong support by Great Eagle Group with its Irrevocable Undertaking

and intention to make excess application4

Strengthen our financial position to weather the COVID-19

pandemic and benefit from future business recovery3

12

Key investment highlights of the Trust Group

The customer base of our hotels has been diversified in terms of geography and segments

China39.2%

Australia & NZ

9.0%US

8.0%

Europe (ex UK)7.0%

Rest of Asia

31.6%

Others5.2%

The hotels are strategically located on the Kowloon

Peninsula in Hong Kong

High quality portfolio with a balanced mix of room and

non-room revenue

Diversified customer base in terms of geography

and customer segments

3 Managed under the internationally recognised Langham

brands by the hotel manager, which has presence across

four continents

4

FY19 customer base

(by geography)FY19 customer base

(by segment)

Wide range of non-room revenue sources including food and beverage, banquet services, meeting and conference facilities and spa facilities

Award-winning restaurants (Michelin star-rated) and quality conference spaces

Close proximity of key tourist and shopping belts, existing and expanding commercial districts

Easily accessible via major roads, MTR stations, the Hong Kong International Airport and rail to mainland China

Our hotels are managed by Langham Hotels International Limited, a wholly-owned subsidiary of Great Eagle

Has an operating track record of over 20 years

It currently manages a portfolio of over 20 hotels located in

major cities over four continents, including:

Retail58.5%

Travel21.0%

Corporate8.5%

Group7.5%

Others4.4%

1 2

The Langham,

London

The Langham,

Shanghai,

Xintiandi

The Langham,

New York,

Fifth Avenue

The Langham,

Melborune

Sources: Company filings and official websites

13

Expected Transaction

Timeline

14

Date1,2,3 Event

16 Jul 2020 Date of Rights Issue announcement

11 Aug 2020 Last day of dealing in the SSUs on a cum-rights basis

12 Aug 2020 First day of dealing in the SSUs on an ex-rights basis

4:30pm on 13 Aug 2020 Latest time for lodging transfers of SSUs to qualify for the Rights Issue

14 - 20 Aug 2020 Closure of the Registers (both dates inclusive)

20 Aug 2020 Record Date

21 Aug 2020 Registers re-open

21 Aug 2020 Despatch of Prospectus Documents

9:00am on 25 Aug 2020 First day of dealing in nil-paid Rights SSUs

4:30pm on 27 Aug 2020 Latest time for splitting nil-paid Rights SSUs

4:00pm on 1 Sep 2020 Last day of dealing in nil-paid Rights SSUs

1 Sep 2020First day for free exchange of existing certificates of SSUs in board lots of 500 SSUs each for new certificates of SSUs in board lots of 2,000

SSUs each

4:00pm on 4 Sep 2020 Latest time for acceptance of and payment for the Rights SSUs and for application and payment for excess Rights SSUs

4:30pm on 9 Sep 2020 Rights Issue expected to become unconditional

11 Sep 2020Announcement of the allotment results of the Rights Issue to be published on the respective websites of the Stock Exchange and

the Trust and the Company

14 Sep 2020 Despatch of refund cheques for wholly and partially unsuccessful excess applications

14 Sep 2020 Despatch of certificates of fully-paid Rights SSUs

14 Sep 2020 Last day for trading in the SSUs in board lots of 500 SSUs each in the original counter

9:00am on 15 Sep 2020 Dealings in fully-paid Rights SSUs commence

15 Sep 2020 Effective date of the change in board lot size from 500 SSUs to 2,000 SSUs

9:00am on 15 Sep 2020 Designated broker commences standing in the market to provide matching services for the sale and purchase of odd lot of SSUs

4:00pm on 7 Oct 2020 Designated broker ceases standing in the market to provide matching services for the sale and purchase of odd lot of SSUs

4:30pm on 9 Oct 2020Last day (and latest time for submission of certificates of SSUs to the Registrar) for free exchange of existing certificates of SSUs in board

lots of 500 SSUs each for new certificates of SSUs in board lots of 2,000 SSUs each

Expected transaction timelineJu

ly –

Au

gu

st

Sep

tem

be

r

Notes:

1. All times and dates refer to Hong Kong local times and dates

2. Dates or deadlines specified in the expected transaction timeline above are indicative only and may be extended or varied by the Trust and the Company. Any changes to the expected transaction timeline

will be published or notified to the Unitholders and the Stock Exchange as and when appropriate

3. The proposed change in board lot size is subject to completion of the Rights Issue. If the Rights Issue is not completed, the change in board lot size will not be implemented

Relating to the proposed change in board lot size

Octo

be

r