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C&D INTERNATIONAL INVESTMENT GROUP LIMITED
建 發 國 際 投 資 集 團 有 限 公 司
(Incorporated in the Cayman Islands with limited liability)
(STOCK CODE: 1908)
DISCLOSEABLE AND CONNECTED TRANSACTION
IN RELATION TO THE ACQUISITION OF
- 90% EQUITY INTERESTS OF CHANGSHA ZHAOXIANG; AND
- 100% EQUITY INTERESTS OF XIAMEN ZHAODINGLONG
Reference is made to the announcements of the Company dated 7 May 2021 and 13 August 2021, whereby it was announced that (i) Yi Yue and Xiamen Zhaoyirong, indirect wholly-owned subsidiaries of the Company, entered into the Zhuzhou Yuefa Equity Transfer Agreements with C&D Real Estate, pursuant to which C&D Real Estate agreed to sell and Yi Yue and Xiamen Zhaoyirong agreed to purchase 95% and 5% equity interests in Zhuzhou Yuefa, respectively; and (ii) Xiamen Zhaochengyao, an indirect wholly-owned subsidiary of the Company, entered into the Cooperation Agreement with Xiamen Guoji Xintuo, Fujian Zhaofeng, C&D Jiarun and Xiamen Liyuan, pursuant to which C&D Jiarun and Xiamen Liyuan agreed to sell and the joint venture agreed to purchase 100% equity interests in Fujian Zhaofeng.
THE CHANGSHA ZHAOXIANG EQUITY TRANSFER AGREEMENTS
The Board is pleased to announce that, on 9 September 2021, Yi Yue and Xiamen Zhaoyirong, indirect wholly-owned subsidiaries of the Company, entered into the Changsha Zhaoxiang Equity Transfer Agreements with C&D Real Estate, pursuant to which, among other things, C&D Real Estate agreed to sell and Yi Yue and Xiamen Zhaoyirong agreed to purchase 85% and 5% equity interests in Changsha Zhaoxiang, respectively. The cash consideration under the Changsha Zhaoxiang Equity Transfer Agreements shall be RMBNil. Yi Yue and Xiamen Zhaoyirong shall repay the shareholder's loan (principal and interests) of approximately RMB808,877,000 (with reference to the date of this announcement and subject to adjustment) previously advanced by C&D Real Estate to Changsha Zhaoxiang in accordance with the proportion of the equity interests in Changsha Zhaoxiang to be held by Yi Yue and Xiamen Zhaoyirong.
Upon completion of the transactions contemplated under the Changsha Zhaoxiang Equity Transfer Agreements, Yi Yue and Xiamen Zhaoyirong will hold 85% and 5% equity interests in Changsha Zhaoxiang, respectively. As such, Changsha Zhaoxiang will become an indirect subsidiary of the Company and its financial results will be consolidated into the consolidated financial statements of the Company.
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THE XIAMEN ZHAODINGLONG EQUITY TRANSFER AGREEMENTS
The Board is pleased to announce that, on 9 September 2021, Shanghai Shenggao and Xiamen Zhaoyirong, indirect wholly-owned subsidiaries of the Company, entered into the Xiamen Zhaodinglong Equity Transfer Agreements with C&D Real Estate and Xiamen Liyuan, pursuant to which, among other things, C&D Real Estate and Xiamen Liyuan agreed to sell and Shanghai Shenggao and Xiamen Zhaoyirong agreed to purchase 95% and 5% equity interests in Xiamen Zhaodinglong, respectively. The cash consideration under the Xiamen Zhaodinglong Equity Transfer Agreements shall be RMBNil. Shanghai Shenggao and Xiamen Zhaoyirong shall repay the shareholder's loan (principal and interests) of approximately RMB636,608,000 (with reference to the date of this announcement and subject to adjustment) previously advanced by C&D Real Estate to Xiamen Zhaodinglong in accordance with the proportion of their respective equity interests in Xiamen Zhaodinglong to be held by Shanghai Shenggao and Xiamen Zhaoyirong.
Upon completion of the transactions contemplated under the Xiamen Zhaodinglong Equity Transfer Agreements, Shanghai Shenggao and Xiamen Zhaoyirong will hold 95% and 5% equity interests in Xiamen Zhaodinglong, respectively. As such, Xiamen Zhaodinglong will become an indirect wholly-owned subsidiary of the Company and its financial results will be consolidated into the consolidated financial statements of the Company.
LISTING RULES IMPLICATIONS
As announced by the Company on 7 May 2021 and 13 August 2021, (i) Yi Yue and Xiamen Zhaoyirong entered into the Zhuzhou Yuefa Equity Transfer Agreements with C&D Real Estate, pursuant to which C&D Real Estate agreed to sell and Yi Yue and Xiamen Zhaoyirong agreed to purchase 95% and 5% equity interests in Zhuzhou Yuefa, respectively; and (ii) Xiamen Zhaochengyao entered into the Cooperation Agreement with Xiamen Guoji Xintuo, Fujian Zhaofeng, C&D Jiarun and Xiamen Liyuan, pursuant to which C&D Jiarun and Xiamen Liyuan agreed to sell and the joint venture agreed to purchase 100% equity interests in Fujian Zhaofeng. Pursuant to Rule 14A.81 of the Listing Rules, the transactions contemplated under the Equity Transfer Agreements are required to be aggregated with the Previous Transactions.
As one or more of the applicable percentage ratios in respect of the Aggregated Transactions exceeds 5% but is less than 25%, the Aggregated Transactions constitute discloseable transactions under Chapter 14 of the Listing Rules and are subject to the reporting and announcement requirements.
As (i) C&D Real Estate is a controlling shareholder of the Company and (ii) Xiamen Liyuan is a wholly-owned subsidiary of C&D Real Estate, C&D Real Estate and Xiamen Liyuan are connected persons of the Company. As such, the transactions contemplated under the Equity Transfer Agreements constitute connected transactions under Chapter 14A of the Listing Rules and are subject to reporting, announcement and independent shareholders approval requirements. An EGM will be held to seek the approval of the Independent Shareholders of the transactions contemplated under the Equity Transfer Agreements.
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Well Land (which held 765,134,106 issued Shares, representing approximately 59.92% of the issued share capital of the Company as at the date of this announcement), a subsidiary of C&D Real Estate, shall abstain from voting on the proposed resolutions to approve the transactions contemplated under the Equity Transfer Agreements at the EGM. Save for the aforesaid and to the best of the knowledge, information and belief of the Directors after having made all reasonable enquiries, as at the date of this announcement, no other Shareholder is interested in the transactions contemplated under the Equity Transfer Agreements.
An Independent Board Committee consisting of all the independent non-executive Directors will be established to consider and advise the Independent Shareholders on the transactions contemplated under the Equity Transfer Agreements. An independent financial adviser will be appointed by the Company to advise the Independent Board Committee and the Independent Shareholders as to whether the terms of the Equity Transfer Agreements are fair and reasonable, and the transactions contemplated under the Equity Transfer Agreements are on normal commercial terms or better, in the ordinary and usual course of business of the Company, and in the interests of the Company and the Shareholders as a whole.
GENERAL
The Company will despatch a circular to its Shareholders on or before 30 November 2021, which is more than 15 business days after publication of this announcement, as the Company requires more time to prepare the information to be included in the circular.
Reference is made to the announcements of the Company dated 7 May 2021 and 13 August 2021, whereby it was announced that (i) Yi Yue and Xiamen Zhaoyirong, indirect wholly- owned subsidiaries of the Company, entered into the Zhuzhou Yuefa Equity Transfer Agreements with C&D Real Estate, pursuant to which C&D Real Estate agreed to sell and Yi Yue and Xiamen Zhaoyirong agreed to purchase 95% and 5% equity interests in Zhuzhou Yuefa, respectively; and (ii) Xiamen Zhaochengyao, an indirect wholly-owned subsidiary of the Company, entered into the Cooperation Agreement with Xiamen Guoji Xintuo, Fujian Zhaofeng, C&D Jiarun and Xiamen Liyuan, pursuant to which C&D Jiarun and Xiamen Liyuan agreed to sell and the joint venture agreed to purchase 100% equity interests in Fujian Zhaofeng.
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THE CHANGSHA ZHAOXIANG EQUITY TRANSFER AGREEMENTS
The Board is pleased to announce that, on 9 September 2021, Yi Yue and Xiamen Zhaoyirong, indirect wholly-owned subsidiaries of the Company, entered into the Changsha Zhaoxiang Equity Transfer Agreements with C&D Real Estate, pursuant to which, among other things, C&D Real Estate agreed to sell and Yi Yue and Xiamen Zhaoyirong agreed to purchase 85% and 5% equity interests in Changsha Zhaoxiang, respectively. The principal terms of the Changsha Zhaoxiang Equity Transfer Agreements are set out below:
Date
9 September 2021
Parties
Vendor: C&D Real Estate
Purchasers: Yi Yue and Xiamen Zhaoyirong
Interests to be acquired
Pursuant to the Changsha Zhaoxiang Equity Transfer Agreements, C&D Real Estate agreed to sell and Yi Yue and Xiamen Zhaoyirong agreed to purchase 85% and 5% equity interests in Changsha Zhaoxiang, respectively.
Consideration
The aggregate consideration for the acquisition of 90% equity interests in Changsha Zhaoxiang is approximately RMB808,877,000 (subject to adjustment), which consists of cash consideration under the Changsha Zhaoxiang Equity Transfer Agreements (RMBNil) and the repayment of the shareholder's loan (principal and interests) advanced by C&D Real Estate to Changsha Zhaoxiang (approximately RMB808,877,000) as at the date of this announcement (subject to adjustment). Yi Yue and Xiamen Zhaoyirong shall pay for the aggregate consideration under the Changsha Zhaoxiang Equity Transfer Agreements after the satisfaction of the conditions precedent under the Changsha Zhaoxiang Equity Transfer Agreements.
The cash consideration under the Changsha Zhaoxiang Equity Transfer Agreements was determined based on arm's length negotiation among Yi Yue, Xiamen Zhaoyirong and C&D Real Estate with reference to the valuation of the total assets and liabilities of Changsha Zhaoxiang conducted by Fujian Puhe and United Zhonghe, third parties independent of the Group, its connected persons and C&D Real Estate. As at 15 June 2021, the total assets of Changsha Zhaoxiang was valued at approximately RMB668,000,000, consisting of (i) net assets of RMBNil and (ii) total liabilities of approximately RMB668,000,000. On the other hand, the shareholder's loan of approximately RMB668,000,000 is based on the total amount of shareholder's loan (principal and interests) previously advanced by C&D Real Estate to Changsha Zhaoxiang according to the audited accounts of Changsha Zhaoxiang as at 15 June 2021 and subject to adjustment for any actual amount incurred for the period after 15 June 2021 to the completion date of the transactions contemplated under the Changsha Zhaoxiang Equity Transfer Agreements. The valuation of Changsha Zhaoxiang has been prepared based
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on the asset-based approach, and assuming that Changsha Zhaoxiang will continue to operate and the assets and liabilities of Changsha Zhaoxiang will be evaluated by specific assessment method corresponding to such assets and liabilities. The assessed value of the equity interests of Changsha Zhaoxiang was determined based on the difference between the assessed value of the total assets and the assessed value of total liabilities.
Under the Changsha Zhaoxiang Equity Transfer Agreements, Yi Yue and Xiamen Zhaoyirong shall repay the shareholder's loan (principal and interests) previously advanced by C&D Real Estate to Changsha Zhaoxiang. As at 15 June 2021, based on the valuation of the total assets and liabilities of Changsha Zhaoxiang conducted by Fujian Puhe and United Zhonghe, the principal of the shareholder's loan (principal and interests) previously advanced by C&D Real Estate to Changsha Zhaoxiang was approximately RMB668,000,000. The shareholder's loan provided to Changsha Zhaoxiang is for payment of the consideration of the Changsha Land and general working capital purpose. As Changsha Zhaoxiang made, among other things, part payment of consideration of the Changsha Land using its shareholder's loan during the period from the date of valuation to the date of this announcement, Yi Yue and Xiamen Zhaoyirong shall repay the shareholder's loan (principal and interests) of approximately RMB808,877,000 advanced by C&D Real Estate to Changsha Zhaoxiang (with reference to the date of this announcement and subject to adjustment). The Directors (excluding the independent non-executive Directors, who will express their views after considering the advice from the independent financial adviser) consider that the aggregate consideration under the Changsha Zhaoxiang Equity Transfer Agreements is fair and reasonable and in the interests of the Company and the Shareholders as a whole.
THE XIAMEN ZHAODINGLONG EQUITY TRANSFER AGREEMENTS
The Board is pleased to announce that, on 9 September 2021, Shanghai Shenggao and Xiamen Zhaoyirong, indirect wholly-owned subsidiaries of the Company, entered into the Xiamen Zhaodinglong Equity Transfer Agreements with C&D Real Estate and Xiamen Liyuan, pursuant to which, among other things, C&D Real Estate and Xiamen Liyuan agreed to sell and Shanghai Shenggao and Xiamen Zhaoyirong agreed to purchase 95% and 5% equity interests in Xiamen Zhaodinglong, respectively. The principal terms of the Xiamen Zhaodinglong Equity Transfer Agreements are set out below:
Date
9 September 2021
Parties
Vendors: C&D Real Estate and Xiamen Liyuan
Purchasers: Shanghai Shenggao and Xiamen Zhaoyirong
Interests to be acquired
Pursuant to the Xiamen Zhaodinglong Equity Transfer Agreements, C&D Real Estate and Xiamen Liyuan agreed to sell and Shanghai Shenggao and Xiamen Zhaoyirong agreed to purchase 95% and 5% equity interests in Xiamen Zhaodinglong, respectively.
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