Huayu Expressway (01823) announced that on June 29, 2023, Shenzhen Huayu Wine Development Co., Ltd., a wholly owned subsidiary of the company, intends to acquire 65% of the target company, Huajia Liquor (Shenzhen) Co., Ltd., at a consideration of RMB 315 million.
It is reported that the target company is mainly engaged in alcohol trade and investment in Guizhou Zunfeng, and has carried out alcohol trade business since 2021. On October 14, 2019, the seller, the target company and the joint venture partner entered into a joint venture agreement to establish Guizhou Zunfeng in accordance with Chinese law, according to which the target company and the joint venture partner own approximately 44.94% and 55.06% respectively. The target company's investment in Guizhou Zunfeng is accounted for using the equity method. The financial performance of the target company is mainly attributed to the performance of Guizhou honorable friends.
Guizhou Zunpeng is mainly engaged in the production and sale of base liquor, which is a common raw material for liquor production, and has entered the primary stage of base liquor production and sale since 2020. Guizhou Zunfeng's main customers include Kweichow Moutai Group, China's leading liquor producer. As at the date of announcement, the principal assets of Guizhou Zun Peng include (I) a site located in Jindao Village, Yaxi Town, Bozhou District, with a total area of 436640.3 square metres designated for industrial use, and (ii) a distiller's grains production facility with an area of 132160.39 square metres built on the site. As of the date of announcement, (I) a total area of 274855.2 square meters of land has been granted a land use license, of which a total area of 150261 square meters has been recognized by the relevant departments as idle land, and construction is under way after Guizhou Zunpeng has obtained the necessary building permit; (ii) 161785.1 square meters of land has yet to be obtained.