Zhitong Finance App News, China Health Group (00673) announced that the company and Chinese companies entered into a cooperative framework agreement on intended cooperation to distribute medical and health products. On February 6, 2023, the buyer (Longheng Investment Co., Ltd., a direct wholly-owned subsidiary of the company) entered into an agreement with such sellers, according to which the buyer conditionally agreed to acquire shares for sale (accounting for 51% of the total issued share capital of the target company Golden Alliance Limited on the completion date), at a cost of HK$153 million (subject to such adjustments), which will be passed Payment is made as follows: (1) issuance of acceptance notes with a total amount of HK$47,125 million; and (2) the company allocates and issues up to 87.5 million consideration shares to such sellers at the issue price of HK$1.21 per share.
The announcement stated that after careful consideration, the buyer had decided to exercise the right of termination under the agreement in accordance with the withdrawal clause, with immediate effect. On April 23, 2024 (after the trading session), the buyer issued a notice of termination in accordance with the terms of the agreement.
According to the agreement, if the buyer exercises its rights under the withdrawal clause, the buyer will return (among other things) the shares for sale to such sellers and any associated costs shall be borne by those sellers.
According to the agreement, if the return of the shares to be sold has been completed, the agreement and the buyer's and company's liability under it shall be terminated and terminated.
After the return of the shares to be sold is completed, Golden Alliance Limited will no longer be a subsidiary of the company, and the company will no longer hold any interest in the target group.
Since the target group recorded a net loss of approximately RMB 6.332 million for the year ended March 31, 2024, which was significantly different from the guaranteed profit for the 2024 fiscal year, the sale mitigated potential other financial risks for the company. Furthermore, sales matters help the company optimize resource allocation, enhance the Group's risk management capabilities, and achieve long-term stable and healthy development.