GuocoLand Limited (“GLL” or the “Company”) is pleased to announce that its wholly-owned subsidiary, GuocoLand (China) Limited (“GLC”) has today signed a conditional agreement (“Share Acquisition Agreement”) to acquire a 94.93% stake in Nanjing Ma Hui Property Development Co., Ltd (“Ma Hui”) from San Bao Group Co., Ltd (the “Acquisition”). San Bao Group Co., Ltd or a related entity will hold the remaining 5.07% of Ma Hui. The joint venture between GLC and San Bao Group Co., Ltd will be a Chinese-Foreign Equity Joint Venture (“Joint Venture”).
Ma Hui has an existing registered capital of Rmb100.5 million and owns the land use rights to a land parcel of approximately 90,000 square metres with saleable area of about 180,000 square metres (the “Site”). The Site is located in the Maqun area of the Qixia District in the eastern part of Nanjing City and is about 14 kilometres to the Nanjing City Centre at Xinjiekou. It comprises two plots designated primarily for residential development with about 25% of its saleable area being designated for commercial development. The term of the land use rights is 70 years for residential land and 50 years for commercial land.
The Acquisition is subject to, inter alia, the requisite approval from the Nanjing Commercial Bureau for the transfer of the 94.93% stake in Ma Hui to GLC, the issuance of a new business licence by the Nanjing Industrial and Commercial Bureau and approvals of the relevant governmental and regulatory authorities being obtained by 1 April 2006 or such later date as may be agreed between the parties. The Joint Venture will take effect upon completion and Ma Hui will become a downstream subsidiary of GLL.
The total consideration for the Acquisition is approximately Rmb322 million (US$39.9 million) payable in tranches to San Bao Group Co., Ltd.The Acquisition will be funded from GLL’s internal resources and borrowings.
The Acquisition adds to GLC’s existing land bank in Nanjing, which is in line with GLL’s strategy to build a solid asset and business base to enhance its reputation as a quality developer in China through GLC and its subsidiaries. GLC has established embedded property operations in the major cities of Beijing, Shanghai and Nanjing.
The Acquisition and Joint Venture are not expected to have any material effect on the earnings per share or net tangible assets per share of the GLL Group for the current financial year ending 30 June 2006.
None of the Directors or substantial shareholders of GLL has any interest, direct or indirect, in the Acquisition and the Joint Venture.
