Zhitong Financial App News, Dingfeng Group Automotive (06878) issued an announcement regarding the agreement between the buyer (Hanran Limited) and the seller (wholly owned subsidiary of the company) for the sale of Differ Group (China) Company Limited100% interest on December 23, 2022. The buyer shall pay the consideration of RMB 1.068 billion in the manner specified in the agreement (consisting of the consideration of RMB 850 million for the shares to be sold and the target shares and RMB 218 million for the loan for sale). The buyer has not paid part of the consideration for the shares in accordance with the provisions of the agreement.

In order to remedy the above situation and for the benefit of the Company and its shareholders as a whole, on 13 October 2023, the Purchaser and the Vendor entered into a supplementary deed in which the parties agreed to offset the unpaid consideration A (unpaid amount of RMB150 million due on 31 July 2023) and unpaid consideration B (unpaid consideration of RMB160 million payable on 31 January 2024) by enforcing the security of the shares by the seller. Upon completion of the execution of the share mortgage, the buyer will no longer own any interest in Company I (Xiamen Dingdi wholly-owned subsidiary of Lishui City Fufeng Cultural Tourism), Company J (Xiamen Dingdi wholly-owned subsidiary Xiamen Dingzao Commercial Operation Management) and Company K (Xiamen Dingzang Commercial Operation and Management Lishui Branch).

Upon completion of the execution of the share mortgage under the supplementary deed, the buyer will no longer hold any equity interest in Company I and Company J. As Company K is a branch of Company J, the buyer will no longer hold any equity in Company K. Xiamen Dingge equity or Xiamen Dingge equity designated company holds 100% of the total equity of company I, company J and company K. Company I, Company J and Company K will then become indirect wholly-owned subsidiaries of Dingfeng Group Automobile. Therefore, the financial results of Company I, Company J and Company K will be consolidated into the Group's financial statements.

According to the notice, the buyer still has to pay the unpaid consideration An of RMB 150 million together with the interest payable in arrears. Despite repeated requests from the seller, the buyer was unable to establish a clear timetable for the settlement of unpaid payables for the sale. In order to protect the overall interests of the company and its shareholders, the seller decided to enforce the share mortgage to reduce the risk. The terms of the supplementary deed are negotiated between the seller and the buyer on an equitable basis. The directors are of the view that, given the buyer's current financial situation, especially its ability to repay the unpaid price and accrued interest, it has been adversely affected by the current global economic situation; lengthy and costly legal proceedings against the buyer may not be in the best interest of the group, as it may not be conducive to the recovery of outstanding payments. And the conclusion of a supplementary deed will provide an opportunity for the Group to repurchase its interest in the target shares to reduce any further losses.