Gelonghui November 6 | Zhongjun Group Holdings (01966.HK) announced that on November 6, 2023, the seller (an indirect wholly-owned subsidiary of Zhongjun Group Holdings Co., Ltd.)A sales agreement was concluded with the buyer (an indirect wholly-owned subsidiary of Zhongjun Business Management), according to which (i) the buyer has agreed to the acquisition and the seller has agreed to sell the sales shares, which is equivalent to the total issued share capital of the target company Jushi Development Co., Ltd.; and (ii) the seller has agreed to promote Junhui Real Estate (a wholly-owned subsidiary of Zhongjun)Xiang Zhongjun Business Management (a wholly-owned subsidiary of Zhongjun Business Management)The sale debt was transferred, and the buyer had agreed to induce Zhongjun Commercial Management to accept the sale debt transfer at a cost of about RMB 1,090 million. The cost would be to disburse part of the internal resources managed by Zhongjun Business Management and part of the idle proceeds from the initial public sale with Zhongjun Commercial Management.
The target company is a limited company incorporated in the British Virgin Islands, a direct wholly-owned subsidiary of the seller, mainly engaged in investment and holding. The target company wholly owns Zhiyi Investment Co., Ltd. (a limited company incorporated in Hong Kong, mainly engaged in investment and holding), while Zhiyi Investment Limited is wholly owned by Titeng Real Estate (a limited company established in China, mainly engaged in holding this property, and the property is also its main asset).
The property is an Ole shopping mall complex. It was built on a plot of land located at No. 8 Xincheng East Street, Mentougou District, Beijing, China, covering an area of about 26,900 square meters. It has five floors above ground and one floor below ground. The total construction area is about 78,500 square meters, and the related land use rights are valid until March 11, 2059, and is used for commercial purposes. The original land acquisition, construction and development costs incurred by Junhui Real Estate for this property are approximately RMB 1.4 billion.
The transaction was carried out due to Zhongjun Commercial Management's intention to expand its business to operate commercial properties and bring greater profitability to shareholders in the face of the downturn in the property management industry. Due to the ideal quality of the property and the good prospects for expanding to the Ole shopping mall, the board of directors of Zhongjun Business Management decided to use idle cash to carry out the transaction, bringing a stable source of rental income and growth potential to Zhongjun Business Management Group.