Gelonghui, September 4?Cornerstone Holdings (01592.HK) announcementOn September 4, 2023, the sellerPacific stone group co., Ltd, seller's guarantor and buyerPegasus Stone LimitedEnter into a sale and purchase agreement under which the buyer conditionally agrees to buy and the seller conditionally agrees to sell the sale shares, which is equivalent to the target companyPacific mining Corp.Of the total issued share capital, the target company holds Xiamen Asia Pacific through Pacific China. The consideration for the acquisition is HK $100 million (subject to adjustment) and will be paid by way of allotment and issue of consideration shares at the issue price in accordance with the special authority to be sought by the Company at the EGM.
Upon completion, the buyer will hold the entire issued share capital of the target company. Therefore, the Target Company, Pacific China and Xiamen Asia Pacific will become wholly owned subsidiaries of the company, and the financial performance of the Target Group will be consolidated in the company's financial statements.
The target company is a limited company registered in the British Virgin Islands, mainly engaged in investment holding. As at the date of announcement, the seller holds the entire issued share capital of the Target Company, while the Target Company holds a 100% equity interest in Xiamen Asia Pacific through its wholly-owned subsidiary, Pacific China. As of the announcement date, the target reorganization has not yet been completed. Xiamen Asia Pacific and Pacific China is the principal operating subsidiary of the Target Group, mainly engaged in the supply, laying and trading of dolomite and granite and other dolomite related businesses in China.
The Group is a leading building construction subcontractor in Hong Kong, mainly supplying and laying dolomite and granite for construction projects in Hong Kong and Macau. However, due to the influence of coronavirus disease in 2019, uncertainties in the local property market and rising costs of building materials and construction workers, the overall performance of the construction industry in Hong Kong and Macau has not been satisfactory in recent years.
After considering the above, in order to diversify and expand the geographical territory of the Group's main business, the company's management intends to enter the supply and distribution market of dolomite and granite products in China. According to the non-competitive deed dated 11 June 2018 entered into by Lei in the interests of the Company, Lei, the substantial shareholder of the Company, will not conduct or participate in any business which constitutes or may compete with the business currently and from time to time carried on by the Group. In order to avoid any competition in each other's business, it was resolved that the Group would be involved in the sales and distribution of dolomite and granite products in China through the acquisition.