Gelonghui, May 14, 丨 Lixin International (00191.HK) and Lixin Development (00488.HK) announced that on May 14, 2024, the seller (including Kingswood and Bright Jewel, each an indirect wholly-owned subsidiary of Lixin Development) and the buyer Weishan Shipping Pte. Ltd entered into a sales agreement, according to which (i) each seller has agreed to sell and the buyer has agreed to purchase the sales shares (accounting for 95% of the issued and paid up share capital of the target company Singapore Guangcheng Co., Ltd.); and (ii) each seller has agreed to sell and transfer and the buyer has agreed to buy and accept the relevant shareholder loans from each seller to transfer the relevant shareholder loans at a total cost of US$14.787 million.
Specifically, (i) Kingswood and Bright Jewel will sell to the buyer a total of 475,000 common shares (accounting for a total of 47.5% of the target company's issued and paid up share capital); and (ii) Kingswood and Bright Jewel will sell and transfer to the buyer's shareholders a total loan amount of P$12.66 million. Therefore, Lai Sun Development Group (through Kingswood and Bright Jewel) will collect a total amount of US$7.3935 million from the buyer based on the total cost.
Currently and before completion, the target companies are 25%, 25%, 10% and 40% of Kingswood, BrightJewel, Feldmore and Huang Qing respectively. Upon completion, the target companies will be held by Kingswood, BrightJewel, Feldmore, Huang Qing, and the buyer, respectively, 1.25%, 0.5%, 2%, and 95%.
The target company holds 90% of the golf course interest indirectly (through holding an interest in a contractual joint venture).
According to the sale agreement, the buyer has agreed to grant a put option to Kingswood after completing the transaction and Kingswood's payment of P1 to the buyer. According to this, at any time from the completion date and as long as Kingswood remains a shareholder of the target company, Kingswood has the right to require the buyer to purchase Kingswood's remaining shares in the target company from Kingswood in accordance with the sale agreement. After exercising the put option and Kingswood paying the price of PL1 to all other sellers and buyers, Kingswood must also exercise the deferred sale option to direct the other sellers to sell and transfer their remaining shares equal to the target company to the buyer.
In view of ongoing business development requirements and complex business environment and policy risks, the sale (and put options after being exercised by Kingswood) will help Lixin Development Group to refocus management resources and reallocate financial resources. Proceeds from the sale will be used to improve its capital structure and/or general corporate use, and enhance the overall cash flow and financial position of Lai Sun Garment Group and Lai Sun Development Group.