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YIDA CHINA HOLDINGS LIMITED ᄂ༺ʕછٰϞࠢʮ̡
(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 3639)
INSIDE INFORMATION PROGRESS OF ARBITRATION
This announcement is made by Yida China Holdings Limited (the "Company", and together with its subsidiaries, the "Group") pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) (the "SFO").
OVERVIEW OF ARBITRATION
Reference is made to the annual reports of the Company for the years ended 31 December 2017, 31 December 2018 and 31 December 2019 and the interim reports of the Company for the six months ended 30 June 2018, 30 June 2019 and 30 June 2020 (collectively, the "Previous Reports"). Unless the context requires otherwise, all terms defined in the Previous Reports shall have the same meanings when used herein.
As stated in the Previous Reports, in June 2016, the Group received notices from certain joint venture partners (collectively, the "Claimants") of two joint venture companies, namely Dalian Yihong Property Development Co. and Dalian Yize Property Development Co. (the "JVs"), in respect of the exercise of a put option (the "Amended Put Option") at the price determined pursuant to a formula stipulated in the supplementary agreements signed in December 2013 (the "Supplemental Agreement") entered into between the Claimants and certain wholly-owned subsidiaries of the Company (collectively, the "Respondents"). On 23 October 2017, the Group received an arbitration notice in respect of the submission of arbitration applications by the Claimants relating to the exercise of the Amended Put Option stipulated in the Supplemental Agreement (the "Arbitration"). Up to the release of the Previous Reports, no further notice had been received by the Group.
PROGRESS OF ARBITRATION
The Company received the final award (the "Final Award") from the Hong Kong International Arbitration Centre regarding the Arbitration on 21 October 2020.
In the Final Award, the arbitral tribunal ordered that:
(i) the price of the Amended Put Option shall be US$108,757,937;
(ii) certain subsidiaries of the Company shall within 14 days from the date of the Final Award pay the full put option price of US$108,757,937 to the Claimants together with US$84,113,389 being interest accrued up to the date of the Final Award. Upon receipt of such amounts, the Claimants shall take steps in good faith to (1) transfer the equity interest of the Claimants in the JVs to the relevant Respondent; and (2) complete any PRC administrative and/or tax procedures to effectuate the transfer of those equity interests; and
(iii) certain subsidiaries of the Company shall bear and pay the Claimants' legal costs and expenses in the amount of US$6,711,972.04 and the cost of the Arbitration in the amount of HK$6,214,610.72.
Following receipt of the Final Award, the Company has been proactively discussing with the Claimants and exploring alternatives to settle the amount that might have to be paid as a result of the Final Award. The Company hereby announces that, as at the date of this announcement, the Company is in the final stage of finalizing a settlement agreement with the Claimants to reduce the amount of payment and extend the deadline of payment pursuant to the Final Award. Further announcement will be made by the Company as soon as the settlement agreement is finalized and entered into by the parties. The Company intends to fund the payment to be made with the Group's internal resources, which may include additional cash flow to be obtained by the Group through sales of properties in the Group's ordinary course of business as well as potential asset disposals should suitable opportunities arise.
IMPACT ON THE FINANCIAL AND OPERATION POSITION OF THE GROUP
As stated in the Previous Reports, as at 30 June 2020, the Group had recognised derivative financial liabilities in relation to the Amended Put Option amounting to approximately RMB916 million. As a result of the Final Award, the Group should acquire the remaining equity interests in the JVs, and the JVs will become the wholly-owned subsidiaries of the Group. Taking into consideration the Respondents' liability to bear and pay any interest accrued up to the date of the Final Award, a further fair value loss of approximately RMB22 million on derivative financial liability will be recognised in the financial results of the Group for the second half year ending 31 December 2020, which is preliminarily estimated based on the fair value of the JVs as at 30 June 2020 and will be adjusted. In addition, the Group will recognise expenses in relation to above-mentioned legal expenses and cost of Arbitration amounting to approximately RMB53 million. Upon the finalization of the settlement agreement, the price of the Amended Put Option and interest accrued up to the date of the Final Award may be adjusted accordingly.
As at the date of this announcement, the business and operations of the Group remain normal.
Save as disclosed above, the Board is not aware of any information which must be announced to avoid a false market in the Company's securities or of any inside information that needs to be disclosed under the Inside Information Provisions (as defined in the Listing Rules) of Part XIVA of the SFO as at the date of this announcement.
The financial information contained in this announcement is based on the published unaudited financial statements of the Group for the six months ended 30 June 2020, which have not been audited or reviewed by the auditors of the Company, with reference to the information currently available to the Group. The Board wishes to emphasize that the Company is in the course of preparing and finalizing the final results of the Group for the year ended 31 December 2020, which have not been finalized, reviewed or audited, and may be subject to adjustment. Details of any further information on the above matters will be announced and disclosed in a separate announcement (if necessary) in accordance with the Listing Rules, or be disclosed in the final results of the Company for the year ended 31 December 2020, which is expected to be published in March 2021.
Shareholders and potential investors of the Company are advised to exercise caution when dealing in the Shares.
By order of the Board
Yida China Holdings Limited
Jiang Xiuwen
Chairman and Chief Executive Officer
Hong Kong, 25 February 2021
As at the date of this announcement, the executive directors of the Company are Mr. Jiang Xiuwen, Ms. Zheng Xiaohua and Mr. Yu Shiping, the non-executive directors of the Company are Mr. Wang Gang and Mr.Zhang Xiufeng and the independent non-executive directors of the Company are Mr. Yip Wai Ming, Mr. Guo Shaomu, Mr. Wang Yinping and Mr. Han Gensheng.