Gelonghui, April 18 | HYGEIA GROUP (01650.HK) announced that on April 18, 2024, the buyer and seller Dongxing Holdings (Wuhan) Co., Ltd. entered into the agreement. According to this, the buyer conditionally agreed to buy and the seller conditionally agreed to sell 51% of the target company Dongxing Convenience Store (Shenzhen) Co., Ltd., the total cost of HK$34.2 million will be paid through the issuance of convertible stock notes after completion.
After completion, the company will beneficially own 51% of the target company's shares, and the target company will become a non-wholly-owned subsidiary of the company. Therefore, the target company's financial results will be comprehensively recorded in the company's accounts.
The target company mainly operates integrated convenience stores and provides e-commerce and online convenience store services under the “Oriental Star Convenience Store” brand. After considering the upward trend in consumer spending in China and profit guarantees provided by the seller, the board believes that the acquisition provides valuable business opportunities for the Group to expand its business and diversify its revenue sources.
After considering that (i) the costs of paying for the acquisition in convertible notes would not incur or generate any immediate cash expenses for the Group; (ii) the profit guarantee provided by the seller; (iii) there was no immediate dilution effect on existing shareholders; and (iv) after considering the factors described above, the directors (including independent non-executive directors) considered that the terms of the agreement were fair and reasonable, based on general commercial terms, and in the overall interests of the company and shareholders.