On 8 September 2021, CIFI Holdings (Group) Co. Ltd. together with its subsidiaries, namely Shenzhen Xuhui, Dongguan Xingji and Dongguan Project Company entered into the Dongguan Cooperation Agreement with Henderson China Properties and Green Charm, an indirect wholly-owned subsidiary of Henderson China Properties, for the formation of joint venture to develop the Dongguan Site located in Dongguan, Guangdong Province, the PRC. As at the date of this announcement, Dongguan Project Company is wholly-owned by Dongguan Xingji, which is in turn wholly-owned by Shenzhen Xuhui. Pursuant to the Dongguan Cooperation Agreement, Green Charm proposes to acquire 50% of equity interest in Dongguan Xingji by way of capital increase. Upon the completion of the capital increase, Dongguan Project Company will be indirectly owned as to 50% by the Company (through Shenzhen Xuhui) and 50% by Henderson China Properties (through Green Charm). Dongguan Xingji and Dongguan Project Company will be consolidated into the financial statements of the Group and Dongguan Project Company will undertake the development of the Dongguan Site. As at the date of this announcement, Shenzhen Xuhui, being an onshore subsidiary controlled by the Company, directly wholly owns the entire issued share capital of Dongguan Xingji. Dongguan Xingji succeeded in the bidding of the land use rights in respect of the Dongguan Site offered for sale by the Natural Resources Bureau of Dongguan City, Guangdong Province in July 2021 and the State-owned Construction Land Use Rights Grant Contract in respect of the Dongguan Site has been entered into. Dongguan Project Company was set up on 21 July 2021 in the PRC as a subsidiary wholly-owned by Dongguan Xingji for the purpose of holding the Dongguan Site directly and the development thereof.
Other than holding the interest in the Dongguan Site, Dongguan Xingji and Dongguan Project Company have no other assets nor conducted any other business operation as at the date of this announcement. The commitment of capital contribution by each of the Company and Henderson China Properties as contemplated under the Dongguan Cooperation Agreement will be RMB 482,800,000. Such contribution will be applied to increase the registered capital
of Dongguan Xingji, as a result of which Dongguan Xingji will be owned as to 50% by Shenzhen Xuhui and 50% by Green Charm and the contributed capital will be partly used for settlement of the land premium. Further funding requirement for project development will be preferentially satisfied, in principle, by external financing.