Zhitong Financial App News, China Coal bed methane (08270) announcement, on December 2, 2021, the seller (Guangxi Lianfu Business Service Co., Ltd. (subsidiary, seller A) and Sun Guilan (seller B) entered into a conditional sale and purchase agreement with the buyer (Guangxi Tongzhou Holdings Co., Ltd.). The seller intends to sell the 100% equity interest in Guangxi Beiliu Gas Co., Ltd. to the buyer with a cash consideration of RMB 80 million (adjustable). Upon completion, the group will no longer hold any interest in the target company (Guangxi Beiliu Gas Co., Ltd.).
The target company is a limited company established in China, mainly engaged in selling pipeline natural gas and providing gas connection services in Beiliu City, Guangxi Province, China. Before completion, the registered capital of the target company is RMB 30 million, which is owned by seller An and seller B by 97.5% and 2.5% respectively.
The board of directors is of the view that the future operating performance of the target company is not optimistic, and the sale of Beiliu company will enhance the financial position of the group and bring more cash flow. It is estimated that the group will make a profit of about HK $90.222 million upon completion.