COASTAL GREENLAND LIMITED Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
沿海綠色家園有限公司 *
(Incorporated in Bermuda with limited liability)
(Stock Code: 1124)On 11 January 2016 (after trading hours of the Stock Exchange), the Vendors, the Target Company and the Purchaser entered into the Disposal Agreement, pursuant to which the Vendors conditionally agreed to transfer 100% equity interests in the Target Company to the Purchaser at nil consideration and a debt in the amount of RMB470,000,000 to RMB570,000,000 (equivalent to approximately HK$552,941,000 to HK$670,588,000) due and owing by Coastal Realty to the Target Company will be waived. Completion shall be conditional, among other things, upon the approval of the Disposal Agreement and the transactions contemplated thereunder by the Shareholders at the SGM.
As one of the applicable percentage ratios set forth under Rule 14.07 of the Listing Rules in respect of the Disposal is 75% or more, the Disposal constitute a very substantial disposal for the Company under Chapter 14 of the Listing Rules and is therefore subject to the reporting, announcement and shareholders' approval requirements under Chapter 14 of the Listing Rules. The SGM will be convened and held for the Shareholders to consider and, if thought fit, to approve the Disposal.
A circular containing, among other things, details of the Disposal Agreement and the Target Company, the financial information of the Group, the financial information of the Target Company, the notice convening the SGM and other information as required under the Listing Rules is expected to be despatched to the Shareholders on or before 7 March 2016, so as to allow sufficient time for the preparation of the relevant information for inclusion in the circular.
Completion of the Disposal is conditional upon the satisfaction or, if applicable, waiver of the conditions set out in the section headed "Conditions for the Disposal Agreement taking effect" in this announcement, including the approval of the Disposal Agreement and the transactions contemplated thereunder by Shareholders at the SGM. Accordingly, the Disposal may or may not proceed. Shareholders and potential investors should therefore exercise caution when dealing in the securities of the Company.At the request of the Company, trading in the Shares on the Stock Exchange has been halted from 9:00 a.m. on Tuesday, 12 January 2016 pending the release of this announcement. Application has been made to the Stock Exchange for the resumption of trading in the Shares on the Stock Exchange from 9:00 a.m. on 21 January 2016.
Reference is made to the circular of the Company dated 13 September 2014 in relation to a major transaction to dispose of 100% equity interests in a wholly-owned subsidiary of the Company.
On 26 August 2014, the Vendors, the Target Company and Shenzhen Qianhai Jianshengtai Engineering Services Co., Ltd. (the "Previous Purchaser") entered into an agreement pursuant to which the Vendors conditionally agreed to dispose of and the Previous Purchaser conditionally agreed to acquire 100% equity interests in the Target Company (the "Previous Agreement"). A resolution to approve the Previous Agreement and the transactions contemplated thereunder was duly passed by the Shareholders at the special general meeting of the Company on 30 September 2014. However, the Previous Purchaser has failed to pay any consideration to the Vendors and the Previous Agreement did not proceed to completion. On 11 January 2016, the Previous Agreement was terminated by relevant parties.
On 11 January 2016 (after trading hours of the Stock Exchange), the Vendors, the Target Company and the Purchaser entered into the Disposal Agreement, pursuant to which the Vendors conditionally agreed to transfer 100% equity interests in the Target Company to the Purchaser at nil consideration and a debt in the amount of RMB470,000,000 to RMB570,000,000 (equivalent to approximately HK$552,941,000 to HK$670,588,000) due and owing by Coastal Realty to the Target Company will be waived, subject to and upon the fulfilment of principal terms and conditions as summarised below.
11 January 2016 (after trading hours of the Stock Exchange)
Vendors : Shanghai Coastal Commercial Investment Management Co. Ltd.
Ms. Yang Jiong Xuan
Target Company : Jingdian Construction Co. Ltd.
Purchaser : Fujian Province Huiwu Construction Engineering Company Limited
Shanghai Coastal is a company established in the PRC with limited liability. It is a wholly-owned subsidiary of the Company and is principally engaged in investment holding. Shanghai Coastal is holding 90% equity interests in the Target Company.
Ms. Yang is the legal owner of 10% equity interests in the Target Company and is holding the 10% equity interests in the Target Company for Coastal Realty. Coastal Realty is a company established in the PRC with limited liability. It is a wholly-owned subsidiary of the Company and is principally engaged in investment holding.
To the best knowledge, information and belief of the Directors and having made all reasonable enquiries, (i) the Purchaser is a company established in the PRC with limited liability and is principally engaged in investment holding; and (ii) the Purchaser and its ultimate beneficial owner(s) are Independent Third Parties.
Pursuant to the Agreement, the Vendors shall dispose of the Sale Shares, representing 100% of the equity interests in the Target Company, upon Completion.
No cash consideration is payable by the Purchaser to the Vendors under the Disposal Agreement.
As at the date of this announcement, Coastal Realty is indebted to the Target Company in the amount of RMB1,636,100,806 (equivalent to approximately HK$1,924,824,000). The parties to the Disposal Agreement have agreed that the Target Company shall waive the debt in the amount of RMB470,000,000 to RMB570,000,000 (equivalent to approximately HK$552,941,000 to HK$670,588,000) due and owing by Coastal Realty to the Target Company. The exact amount of the Debt to be waived will be ascertained upon completion of the due diligence exercise on the Target Company by the Purchaser.
As at 30 September 2015, the unaudited net asset value of the Target Company was approximately RMB250,498,000 (equivalent to approximately HK$305,184,000). The range of RMB470,000,000 to RMB570,000,000 (equivalent to approximately HK$552,941,000 to HK$670,588,000) debt owed by Coastal Realty to be waived upon completion of the Disposal was determined with reference to the price-to-book ratio of comparable construction companies listed on the Stock Exchange with considerable operating segment in the PRC. The price-to-book ratio represented by the lower boundary of RMB470,000,000 is 1.88 which the Directors consider to be fair and reasonable after taking into account (i) the historical business and financial performance of the Target Company;
(ii) the future prospect of the Target Company; and (iii) the expected returns of the existing construction projects undertaken by the Target Company.
Since the Purchaser has to conduct due diligence exercise to evaluate the financial status of the Target Company, the exact amount of the Debt to be waived could only be ascertained at a later stage by the Purchaser and the Vendors based on the findings and results of the due diligence exercise. A debt waiving determination agreement to ascertain the final and exact amount of the Debt to be waived will be entered into by the Vendors, the Target Company and the Purchaser upon completion of the due diligence exercise.
The consideration for the Disposal was determined after arms' length negotiations. The Directors consider that the terms and conditions of the Disposal are fair and reasonable and are on normal commercial terms and are in the interests of the Company and the Shareholders as a whole.
Conditions for the Disposal Agreement taking effectCompletion of the Disposal Agreement is conditional upon (i) the satisfaction of result of due diligence on the Target Company by the Purchaser; and (ii) the passing by the Shareholders at a general meeting of the Company of the ordinary resolution(s) to approve the Disposal Agreement and the transactions contemplated thereunder.
In the event that the above condition is not fulfilled on or before 31 March 2016 (or such other date that may be agreed by the parties in writing), the Disposal Agreement shall lapse and none of the parties to the Disposal Agreement shall have any further obligations towards the other thereunder except for any antecedent breaches (if any).
Completion shall take place on the third Business Day upon fulfilment of the conditions precedent under the Disposal Agreement.
The principal activity of the Company is investment holding. The principal activities of the principal subsidiaries comprise property development, property investment, provision of property management services, project management and construction and project investment services.
The Target Company is a company established in the PRC with limited liability and is principally engaged in construction. As at the date of this announcement, the Target Company is an indirect wholly-owned subsidiary of the Company.
The details of major construction projects undertaken by the Target Company are set out below:
Beijing Bay Project Phase II Residential 40%
Chongqing Coastal Silo City Residential 35%
Foshan Coastal Garden Residential 20%
Tianjin Project Class I Land Development 100%
Wuhan Silo City Phase VI Residential 100% The Target Company will cease to be a subsidiary of the Group after completion of the Disposal.
Set out below is the financial information of the Target Company as extracted from its unaudited management accounts prepared in accordance with the Hong Kong Financial Reporting Standards ("HKFRSs") for the years ended 31 March 2014 and 2015 and for the six months ended 30 September 2015.
Coastal Greenland Limited issued this content on 2016-01-20 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 2016-01-20 13:13:04 UTC
Original Document: http://www.irasia.com/listco/hk/coastal/announcement/a153545-e_01124ann_20160120.pdf
