Gelonghui, December 29丨Chenxing Development (02286.HK) announced that the seller Chenxing Real Estate Development Co., Ltd. (an indirect wholly-owned subsidiary of the company) intends to sell shares in Jinzhong Development to the buyer Jinzhong Development Zone Development and Construction Group Co., Ltd. Since shares are considered state-owned assets according to relevant Chinese rules, share transfers must be publicly tendered and publicized. During the public tender period, the buyer participated in the public tender through the Jinzhong Property Exchange Center to purchase shares developed in Jinzhong from the seller. The board of directors hereby announces that on December 29, 2023, the buyer was confirmed by the Jinzhong Property Exchange Center as the winning bidder of the shares.
On December 29, 2023, the seller entered into an equity transfer agreement with the buyer. According to this, the seller has agreed to sell and the buyer has agreed to buy shares in Jinzhong Development (owning and controlling about 67% of Jinzhong Xiya's shares).” “Equity” refers to all 51% of Jinzhong Development's shares. The total cost of the sale was RMB 100 million. After deducting payments due and payable to the seller and buyer, the remaining amount of RMB 347.89 million shall be paid by the buyer to the seller in cash upon completion.
Jinzhong Development is a limited company established in China, mainly engaged in real estate sales and development. Jinzhong Xiya is a limited company established in China that is mainly engaged in real estate sales and development. Jinzhong Xiya is owned by Jinzhong Development about 67%, and Xi'an Agile Enterprise Management Consulting Co., Ltd. owns about 33%. Jinzhong Development Group's related assets mainly include residential properties in the Yixun Community Project and the Xiyuan Project.
The board of directors believes that the sale is a strategic move to utilize the asset value related to Jinzhong Development Group (which mainly includes residential properties in the first phase of the Yixian Community Project and the Xiyuan Project) at preferential prices. Proceeds from the sale (most of which will be used to repay the Group's existing bank loans) will improve the company's working capital situation and reduce its debt burden, thereby enhancing financial stability. The Board also believes that the sale will place the Group in a more favorable position for future opportunities, thereby allowing potential acquisitions or investments in other land or property projects, making the balance and liability situation more stable.