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| Renames as Joy City Property; Reinforces "Joy City" Brand |
HONG KONG, Nov 4, 2014 - (ACN Newswire) - COFCO Land Holdings Limited ("COFCO Land Holdings" or the "Company," stock code: HK.00207), a large commercial property developer and operator specialising in the development, operation, sales, leasing and management of complexes and commercial properties in China, has released a shareholder circular in relation to the acquisition of Joy City projects, and plan to change its name into Joy City Property Co., Ltd.
The transaction contemplates to acquire 9 properties of the offshore subsidiary wholly owned by the parent company COFCO Group for a total consideration of approximately HK$12.46 billion. The properties include 6 Joy City complexes, a commercial property in Beijing, and non-controlling interests in 2 properties located in Beijing and Shanghai, respectively. The transaction constitutes a very substantial acquisition and a connected transaction, which requires shareholder approval at an extraodinary general meeting ("EGM"). Post completion of the acquisition, the Company is to be renamed "Joy City Property Co., Ltd."
The Company says that according to the terms of the acquisition, COFCO Land Holdings has agreed conditionally to acquire all the outsanding shares and part of shareholder loans of each target company, and satisfy the transaction consideration to the seller in cash at the time of closing. The acquisition consideration is derived from a 42.69% discount to reassessed net asset value plus the shareholder loans amount. The Board of Directors believes the consideration is reasonable and fair, and in line with the interests of shareholders and the Company as a whole. Upon completion of the transaction, COFCO Land Holdings will strength its industry leadership as a developer of urban mixed-use complexes and commercial real estate in the PRC, and continue to foster and reinforce the flagship brand "Joy City" to generate more stable and sustainable investment return for the Company. The Group hopes the acquisition agreement and related asset injection and financing arrangements will be approved by shareholders at the EGM.
In addition, the new name can better represent COFCO Land Holdings' main business and asset profile post the asset injection, and further underscore the flagship brand of "Joy City" as well as the Company's clear positioning as a player committed to developing urban mixed-use complexes and other commercial real estate projects. This renaming facilitates the future operation and growth of the Company and is in the best interests of itself and its shareholders.
The Company intends to raise funds for the transaction consideration through external debt and equity financing transactions. Based on market conditions, COFCO Land Holdings plans to raise debt for no less than 50% of the transaction consideration, with the remaining to be funded through placement of new shares or rights issue. If the Company decided to conduct new share placement, it will issue up to 6,229,892,686 new shares, representing 65.66% of its current outstanding share capital. The parent company COFCO Group will subscribe for up to 67.03% (in proportion to its current shareholding percentage of COFCO Land Holdings) of the new shares and hold at least 51% of the enlarged share capital post issuance in order to maintain its controlling shareholder status. The Company believes that equity financing is an effective way of funding the acquisition, and also an opportunity to introduce long-term strategic or institutional investors which will expand its shareholder base. Moreover, the potential placement of new shares will not increase the Company's gearing ratio and also reduce its operational risk profile. Additionally, COFCO Group's participation in the subscription can help to ensure the successful subscription of the new share placement.
As for the offering price of new shares, the final offering price will be determined on the basis of prevailing market conditions and investor feedback with reference to the NAV per share post asset injection. The offering price will be determined in order to achieve accretion of NAV per share, protect existing shareholders' interests, attract capable institutional investors to optimize the shareholding structure of the Company and improve COFCO Land Holdings' secondary market performance to create desirable return for shareholders. With respect to the floor price of HK$1 per share disclosed in the circular, it is a theoretical price set to allow for the disclosure of a maximum number of news shares to be offered in the circular, and not a reference point for pricing in the actual execution of the offering.
Contact:
Strategic Financial Relations (China) Limited
Ms Nan Dong
Tel: (852) 2864 4811
E-mail: nan.dong@sprg.com.hk
Ms Ada Leung
Tel: (852) 2114 4967
E-mail: ada.leung@sprg.com.hk
Topic: Press release summary
Source: Joy City Property Ltd
Sectors: Daily Finance, Daily News
https://www.acnnewswire.com
From the Asia Corporate News Network
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