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Gemdale Properties and Investment issued new shares of HK $1,273,000,000 for the acquisition of its major shareholder's project

2013-12-12 Source:  Size:TTT
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[Abstract] Gemdale Properties and Investment Corporation Limited Published an announcement during the evening of 18th August: On August 17, 2013, its wholly-owned subsidiary, Sheng Bu Co., Ltd., as the buyer, and the controlling shareholder, Famous Commercial Co., Ltd. as the seller, have agreed to execute an agreement. The buyer will purchase 51% shares of Yongxin Commercial Co., Ltd. and Chengxin Investment (Hong Kong) Co., Ltd. respectively and all the shares of Yongxin Investment Management Co., Ltd. owned by the seller.

     After the announcement of a temporary suspension of stock trading on August 15, Gemdale Properties and Investment Corporation Limited published an announcement on the evening of 18th August - On August 17, 2013, its wholly-owned subsidiary, Sheng Bu Co., Ltd., as the buyer, and the controlling shareholder, Famous Commercial Co., Ltd. as the seller, have agreed to execute an agreement. The buyer will purchase 51% shares of Yongxin Commercial Co., Ltd. and Chengxin Investment (Hong Kong) Co., Ltd. respectively and all the shares of Yongxin Investment Management Co., Ltd. owned by the seller, with a total contract consideration of about HK $ 1,272,700,000. Gemdale Properties and Investment will fully pay the bill by the way of issuing 1.326 billion new shares at the issue price to the seller.

  The above three acquired companies each holds the entire equity interest in Xian Zhujia, Shenyang Gemdale and Xian Zhutian respectively. Xian Zhutian holds a 50% interest in Tianjin Brownstone and the entire equity interest in Shenyang Tuyuan. Besides, Shenyang Tuyuan owns both 50% equity interests of Beijing Jinshui and Ningbo Langyue.

  Companies mentioned above are collectively referred to as “The Target Group”, with the main assets including the properties in Shenyang Binhe East, Xian Tanghua Road, Xian Yanxiang Road, Ningbo Changfeng, Tianjin Xinzhuang, Beijing Mentougou, etc. The floor area is about 184,100 square meters, 279,000 square meters, 264,200 square meters, 147,700 square meters, 285,500 square meters and 339,100 square meters respectively which are intended for residential purposes.

  When the acquisition completes, Gemdale Properties and Investment will hold a 51% interest in the real estate of Shenyang Binhe East, the entire equity interest in the real estate of Xian Tanghua Road, 51% interest in the real estate of Xian Yanxiang Road, 51% interest in the real estate of Ningbo Changfeng, 50% interest in the real estate of Tianjin Xinzhuang and 50% interest in the real estate of Beijing Mentougou.

  Meanwhile, Gemdale Properties and Investment is going to attain Yongxin Commercial, Chengxin Investment, Yongxin Investment and Xian Zhujia, Shenyang Gemdale, Xian Zhutian, Shenyang Tuyuan as its indirect subsidiaries, whose accounts will be consolidated into the account of Gemdale Properties and Investment. Tianjin Brownstone, Beijing Jinshui and Ningbo Langyue will not be consolidated into the account of Gemdale Properties and Investment because the buyer has no controlling rights over them.

  As far as the acquisition is concerned, Gemdale Properties and Investment will enter into a supplementary agreement with Gemdale Corporation [introduction, the latest news]. According to the supplementary agreement, Gemdale Corporation will grant one or more of the target group member companies the non-exclusive right to use several Gemdale trademarks.

  In addition, Gemdale Properties and Investment also states in the notice that on August 17, Hanling entered into a subscription agreement with the Company. As a result, Gemdale Properties and Investment agrees to conditionally distribute and issue shares, while Hanling conditionally agrees to subscribe the agreed subscription shares (up to 777,000,000 shares) on or before the fifth business day after meeting the prerequisite condition, with subscription price of HK$0.96 per share. The lock-up period is six months from the date when the subscription completes.

  Net proceeds from the subscription will be approximately HK $745,000,000, which will be used for developing the current and future property projects of Gemdale Properties and Investment in Mainland China and as working capital.

  Mr. Ling Ke, Mr. Huang Juncan, Mr. Wei Chuanjun and Mr. Xu Jiajun (all are directors) own over 30% equity interests of Hanling in total. This subscription needs to be approved by the independent shareholders before its coming into force. After making this announcement, Gemdale Properties and Investment has applied to Hong Kong Stock Exchange to resume the share trade at 9:00 on August 19, 2013.

KeyWord:Share, acquisition, announcement
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