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RemeGen Co., Ltd. — M&A Activity 2021
Jun 17, 2021
51206_rns_2021-06-17_235b4fcf-2fc3-4fcc-b212-d02018fe760c.pdf
M&A Activity
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Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
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Overseas Chinese Town (Asia) Holdings Limited 華僑城（亞洲）控股有限公司
(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 03366)
VERY SUBSTANTIAL ACQUISITION ACQUISITION OF LAND USE RIGHTS IN HEFEI AIRPORT INTERNATIONAL TOWN
ACQUISITION OF LAND USE RIGHTS
The Board is pleased to announce that Hefei OCT Industry, an indirect non-wholly owned subsidiary of the Company, has successfully won the bid of the land use rights of the Land, being four parcels of land (i.e. the second phase of Hefei Airport International Town) at the total consideration of approximately RMB2,805 million. Hefei OCT Industry has signed the Confirmation Letter with the Hefei Natural Resources and Planning Bureau on 17 June 2021.
LISTING RULES IMPLICATIONS
As one or more of the relevant applicable percentage ratios (as defined in the Listing Rules) in respect of the Land Acquisition are more than 100%, the Land Acquisition constitutes a very substantial acquisition of the Company under Chapter 14 of the Listing Rules.
The Group’s principal business activities include property development, the Company is therefore regarded as a “Qualified Issuer” under Rule 14.04(10B) of the Listing Rules. The Land Acquisition is regarded as a “Qualified Property Acquisition” under Rule 14.04(10C) of the Listing Rules as the Land Acquisition involves an acquisition of governmental land(s) in the PRC from a PRC Governmental Body through an auction governed by the PRC law (as defined in Rule 19A.04 of the Listing Rules). The Land Acquisition is undertaken by the Group in its ordinary and usual course of business.
The Land Acquisition is subject to reporting, announcement and circular requirements, but is exempt from shareholders’ approval requirement pursuant to Rule 14.33A of the Listing Rules.
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GENERAL
A circular containing, among other things, further details of the Land Acquisition will be despatched to the Shareholders in accordance with the Listing Rules for information purposes is expected to be despatched to the Shareholders on or before 26 July 2021, which is more than 15 business days after the publication of this announcement, as more time is required for the preparation of certain information to be included in the circular.
ACQUISITION OF LAND USE RIGHTS
The Board is pleased to announce that Hefei OCT Industry, an indirect non-wholly owned subsidiary of the Company, has successfully won the bid of the land use rights of the Land. Hefei OCT Industry has signed the Confirmation Letter with the Hefei Natural Resources and Planning Bureau on 17 June 2021. The auction is organised by Hefei Natural Resources and Planning Bureau (合肥市自然資源和 規劃局), Hefei Public Resources Trading Supervision and Administration Bureau (合肥市公共資源 交易監督管理局), and is co-organised by Anhui Hefei Public Resources Trading Centre (安徽合肥公 共資源交易中心) and Hefei Land and Mineral Transactions Management Office (合肥市土地礦產交 易管理辦公室). The auction is conducted at the auction hall of Anhui Hefei Public Resources Trading Centre (安徽合肥公共資源交易中心). Within 10 business days from the date of the Confirmation Letter, Hefei OCT Industry shall enter into the Land Use Rights Grant Contract with the Hefei Natural Resources and Planning Bureau in relation to the Land Acquisition. The procedures for delivery of the Land will be arranged within 30 days after the entering into of the Land Use Right Grant Contract.
Reference is also made to the announcement of the Company dated 13 December 2019 and the circular of the Company dated 23 January 2020 regarding a very substantial acquisition of the Company with respect to the acquisition of land use rights in the first phase of Hefei Airport International Town by Hefei OCT Industry (i.e. the 2019 Acquisition). The Land is adjacent to the five parcels of land acquired in the 2019 Acquisition, and all parcels are part of the Project.
CONSIDERATION
The Consideration, being the land premium payable for the land use rights of the Land amounting to approximately RMB2,805 million in aggregate (refundable bid deposit totalling RMB870 million has been paid before bidding, which shall be used to offset the corresponding portion of the Consideration for the Land Acquisition).
The Consideration shall be settled in either one of the following manners:
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(1) the full Consideration to be settled within 30 days from the date of entering into the Land Use Rights Grant Contract; or
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(2) 50% of the Consideration to be settled within 30 days from the date of entering into the Land Use Rights Grant Contract, and the remainder of the Consideration to be settled within 3 months from the date of entering into the Land Use Rights Grant Contract along with the interest accrued on the remainder of the Consideration (the interest rate of which shall be determined by the rate published by the People’s Bank of China (中國人民銀行) as at the date of the settlement of the first 50% of the Consideration).
Hefei OCT Industry may choose one of the above means of settlement.
The Consideration was arrived at as a result of the successful bidding of the Land at the auction. In determining the Consideration, the Directors have taken into account, among other things:
- i. the reference land price of the Land listed by the Hefei Natural Resources and Planning Bureau, in particular, the reference land price for commercial area and residential area.
As further detailed in the paragraph headed “Information on the Land” below, approximately 323 mu (approximately 215,333 square meters) of the Land are commercial area, and approximately 530 mu (approximately 353,333 square meters) of the Land are residential area.
According to the reference land prices listed by Hefei Natural Resources and Planning Bureau, the reference land price listed for commercial usage is RMB1,700,000 per mu (approximately RMB2,550 per square meter) and that for residential usage ranges from RMB4,000,000 per mu (approximately RMB6,000 per square meter) to RMB4,050,000 per mu (approximately RMB6,075 per square meter). Based on the above reference land prices, the reference land price for the commercial area and the residential area alone in aggregate is close to RMB2,700 million (before considering the area for other usage). The Company considers that the Consideration is generally in line with the reference land price listed as corresponding to the area of its different land usage;
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ii. the development potential of the Land. The Land is located in the heart of the Hefei Airport International Town and is connected to a large-scale integrated circuit base and a smart electric car industry park currently under construction. Hefei Airport International Town will provide ancillary living service facilities to such integrated circuit industry base, smart electric car industry park and relevant industries in the surrounding area. The Company believes that such ongoing development in the surrounding area will enhance the value of the Land; and
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iii. the minimum bidding price of RMB2,746 million set by Hefei Land Administration Committee* (合肥市土地管理委員會).
With reference to the above, the Directors consider that the Consideration is fair and reasonable and in the interests of the Company and the Shareholders as a whole.
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The Consideration will be settled by Hefei OCT Industry with its own funds, and with shareholders’ loan from its shareholders which will be provided in proportion to their shareholding’s in Hefei OCT Industry. The portion of shareholders’ loan by OCT Ganghua is expected to be approximately RMB1,030 million.
INFORMATION ON THE LAND
The Land, which is part of the Project, is located in the heart of Hefei Airport International Town, and is the second phase of the Hefei Airport International Town listed for sale by the Hefei Natural Resources and Planning Bureau.
The Project concerns the development of Hefei Airport International Town. Hefei Airport International Town is expected to cover a scope of 9.2 square kilometers and located in the core district of the Xinqiao Technology Innovation Demonstration Zone (新橋科技創新示範區) in Anhui Province of the PRC with a view to cultivating an industrial cluster with international competitiveness and to be developed in phases. Hefei Airport International Town will provide ancillary living service facilities to the integrated circuit industry base and the smart electric car industry park connected to the Land, and Hefei Airport International Town is planned to develop commercial offices, ecological green land, ancillary living facilities and integrated service centres.
As part of the Project, the Land occupies a total site area of approximately 913.05 mu (approximately 608,700 square meters), of which (including the proportionate area for mixed usage area) approximately 530 mu (approximately 353,333 square meters) are residential area, and approximately 323 mu (approximately 215,333 square meters) are commercial area. The Land is designated for commercial, residential and cultural usage with a term of 40, 70 and 50 years, respectively. The Land is planned to develop small high-rise buildings, bungalows and townhouses in the residential area, and commercial streets and business offices in the commercial area. The selling price ceiling of the residential area of the Land specified by Hefei Natural Resources and Planning Bureau is RMB13,800 per square meter. As at the date of this announcement, the Land is a vacant site without any properties on it.
INFORMATION ON HEFEI OCT INDUSTRY
Hefei OCT Industry was established for the development of the Hefei Airport International Town pursuant to the terms of Joint Venture Agreement, and is held by OCT Ganghua, an indirect whollyowned subsidiary of the Company and Huaxing Investment as to 51% and 49%, respectively. Huaxing Investment is principally engaged in industrial investment and investment management. The ultimate beneficial owner of Huaxing Investment is the State-owned Asset Supervision and Administration Commission of Hefei Municipal People’s Government.
Hefei OCT Industry was established for the single purpose relating to the acquisition of land use rights and development in respect of the Project. As of the date of this announcement, Hefei OCT Industry has a registered capital of RMB10 billion, out of which RMB1.47 billion have been paid up by the JV Partners.
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Further information of Hefei OCT Industry and the Joint Venture Agreement have been set out in the circular of the Company dated 23 January 2020.
INFORMATION ON THE GROUP
The principal business activity of the Company is investment holding. The Group is principally engaged in comprehensive development, equity investment and fund management. Equity investment and fund management involve direct equity investment and private equity fund investment in the primary market. Comprehensive development involves development and sale of residential properties, development and management of commercial properties, and development and operation of tourism projects.
OCT Ganghua is a limited liability company established in the PRC and an indirect wholly-owned subsidiary of the Company, which is principally engaged in foreign investment as encouraged and permitted by the PRC Government, investment in and management of cultural tourism and sport facilities, provision of management services for industrial park, leasing self-owned properties and advisory services.
INFORMATION ON HEFEI NATURAL RESOURCES AND PLANNING BUREAU
Hefei Natural Resources and Planning Bureau is a PRC governmental authority and the seller of the Land. To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, Hefei Natural Resources and Planning Bureau is an Independent Third Party.
REASONS FOR AND BENEFITS OF THE LAND ACQUISITION
The Land is part of the Project, which will be developed in different phases. Through the 2019 Acquisition, the Group has been participating in Phase 1 of the Hefei Airport International Town, which is adjacent to the Land and has been progressing smoothly as of the date of this announcement. Participating in Phase 2 by the Land Acquisition is in line with the Group's overall planning of the Project in the early stage, and is expected to create synergies among two Phases. The adjacencies will allow a unified planning and coordination, which in turns could allow a more efficient and comprehensive use of land resources owned by the Group in the Project. Further, in view of the location and surrounding development of the Land and as further illustrated in the paragraph headed “Consideration” above, the Company is optimistic about the growth potential of the Land. Approximately 353,333 square meters of the Land are expected to be for residential use and approximately 215,333 square meters of the Land is expected to be for commercial use. The Land Acquisition will therefore bring in sales income from the sale of the small high-rise buildings, bungalows and townhouses in the residential area of the Land and the sale of office buildings and commercial buidings in the commercial area of the Land, and rental income from the operation of the commercial area. The Directors believe that the Land Acquisition will provide a good investment opportunity and allow the Group to expand its land reserves and in turn enhance the Group’s income and business scale, and is in the interest of the Company and the Shareholders as a whole.
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Having considered the above, the Directors are of the view that the Land Acquisition is in the ordinary and usual course of business of the Company and on normal commercial terms that are fair and reasonable, and in the interests of the Company and the Shareholders as a whole.
LISTING RULES IMPLICATIONS
As one or more of the relevant applicable percentage ratios (as defined in the Listing Rules) in respect of the Land Acquisition are more than 100%, the Land Acquisition constitutes a very substantial acquisition of the Company under Chapter 14 of the Listing Rules.
The Group’s principal business activities include property development, the Company is therefore regarded as a “Qualified Issuer” under Rule 14.04(10B) of the Listing Rules. The Land Acquisition is regarded as a “Qualified Property Acquisition” under Rule 14.04(10C) of the Listing Rules as the Land Acquisition involves an acquisition of governmental land(s) in the PRC from a PRC Governmental Body through an auction governed by the PRC law (as defined in Rule 19A.04 of the Listing Rules). The Land Acquisition is undertaken by the Group in its ordinary and usual course of business. The Land Acquisition is undertaken by the Group and Huaxing Investment via Hefei OCT Industry on a joint basis. Hefei OCT Industry was established for the single purpose relating to the acquisition of land use rights and development in respect of the Project which is consistent with the purpose of the Land Acquisition according to the Joint Venture Agreement which is prepared on an arm’s length base and on normal commercial terms. The Joint Venture Agreement also contains clauses that Hefei OCT Industry must not, (i) without the unanimous consent from OCT Ganghua and Huaxing Investment, change the nature or scope of Hefei OCT Industry’s business and its scope of business shall be at all times consistent with the requirements specified in documents relating to the Project; or (ii) enter into any transactions which are not on an arm’s length basis. Further details of the Joint Venture Agreement are set out in the circular of the Company dated 23 January 2020.
The Board confirms that the Land Acquisition is undertaken in the Group’s ordinary and usual course of business and that the Land Acquisition and the joint venture arrangement contemplated under the Joint Venture Agreement (including its financing and profit distribution arrangements) are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole.
The Land Acquisition is subject to reporting, announcement and circular requirements, but is exempt from shareholders’ approval requirement pursuant to Rule 14.33A of the Listing Rules.
GENERAL
A circular containing, among other things, further details of the Land Acquisition will be despatched to the Shareholders in accordance with the Listing Rules for information purposes is expected to be despatched to the Shareholders on or before 26 July 2021, which is more than 15 business days after the publication of this announcement, as more time is required for the preparation of certain information to be included in the circular.
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DEFINITIONS
In this announcement, unless the context otherwise requires, the following expressions shall have the following meanings:
| “2019 Acquisition” | the acquisition of land use rights of five parcels of land located in |
|---|---|
| the first phase of the Hefei Airport International Town (being part | |
| of the Project) with a total site area of approximately 1,042 mu | |
| (approximately 694,667 square meters) by Hefei OCT Industry on | |
| 13 December 2019. Further information of the 2019 Acquisition is | |
| set out in the announcement of the Company dated 13 December | |
| 2019 and the circular of the Company dated 23 January 2020 | |
| “Board” | the board of directors of the Company |
| “Business Day(s)” | a day on which licensed banks in the PRC are open for business |
| “Company” | Overseas Chinese Town (Asia) Holdings Limited (華僑城（亞洲）控 |
| 股有限公司), an exempted company incorporated in the Cayman | |
| Islands with limited liability, the shares of which are listed on the | |
| main board of the Stock Exchange | |
| “Confirmation Letter” | the auction confirmation letter (成交確認書) entered into between |
| Hefei OCT Industry and the Hefei Natural Resources and Planning | |
| Bureau on 17 June 2021 as a result of successfully winning the bid | |
| for the auction | |
| “connected person(s)” | has the meaning ascribed to it under the Listing Rules |
| “Consideration” | the consideration for the acquisition of the land use rights of the |
| Land | |
| “controlling shareholder(s)” | has the meaning ascribed to it under the Listing Rules |
| “Director(s)” | the directors of the Company |
| “Group” | the Company and its subsidiaries as at the date of this |
| announcement | |
| “Hefei Airport International | Hefei Airport International Town (合肥空港國際小鎮) located in |
| Town” | Xinqiao Technology Innovation Demonstration Zone in Hefei, the |
| PRC |
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| “Hefei Natural Resources and | Hefei Municipal Natural Resources and Planning Bureau (合肥市自 |
|---|---|
| Planning Bureau” | 然資源和規劃局) |
| “Hefei OCT Industry” | Hefei OCT Industry Development Co., Ltd. (合肥華僑城實業發展 |
| 有限公司), a company established in the PRC which is held by | |
| OCT Guanghua and Huaxing Investment as to 51% and 49%, | |
| respectively | |
| “HK$” | Hong Kong dollar(s), the lawful currency of Hong Kong |
| “Hong Kong” | the Hong Kong Special Administrative Region of the People’s |
| Republic of China | |
| “Huaxing Investment” | Hefei Huaxing Konggang Investment Co., Ltd. (合肥華興空港投資 |
| 有限公司), a company established in the PRC | |
| “Independent Third | parties independent of and not connected with the Company and its |
| Party(ies)” | connected persons |
| “Joint Venture Agreement” | the joint venture agreement dated 20 June 2019 and entered into |
| between OCT Ganghua and Huaxing Investment in relation to the | |
| establishment of Hefei OCT Industry, further information of which | |
| is set out in the circular of the Company dated 23 January 2020 | |
| “JV Partners” | OCT Ganghua and Huaxing Investment |
| “Land Acquisition” | the acquisition of land use rights of the Land through an auction |
| “Land” | four parcels of land, located in the second phase of Hefei Airport |
| International Town, with a total site area of approximately 913.05 | |
| mu (approximately 608,700 square meters) | |
| “Land Use Right Grant | State-owned Construction Land Use Rights Grant Contract (國有建 |
| Contract” | 設用地使用權出讓合同) to be entered into pursuant to the |
| Confirmation Letter | |
| “Listing Rules” | the Rules Governing the Listing of Securities on the Stock |
| Exchange | |
| “OCT Ganghua” | Shenzhen OCT Ganghua Investment Holdings Co., Ltd. (深圳華僑 |
| 城港華投資控股有限公司), a company established in the PRC and | |
| a wholly-owned subsidiary of the Company |
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| “PRC” | the People’s Republic of China, | and for | the | purpose | of this |
|---|---|---|---|---|---|
| announcement, excludes Hong |
Kong, | the | Macau | Special | |
| Administrative Region of the People’s Republic of China and | |||||
| Taiwan | |||||
| “PRC Governmental Body” | has the meaning ascribed to it under Rule 19A.04 of the | Listing | |||
| Rules | |||||
| “Project” | the entire project in respect of the | development | of Hefei | Airport | |
| International Town | |||||
| “RMB” | Renminbi, the lawful currency of the PRC | ||||
| “Share(s)” | the share(s) of the Company | ||||
| “Shareholder(s)” | the shareholders of the Company | ||||
| “Stock Exchange” | The Stock Exchange of Hong Kong | Limited | |||
| “%” | per cent. |
Certain Chinese names of institutions, natural persons or other entities have been translated into English and included in this announcement as unofficial translations for reference only.
By order of the board of
Overseas Chinese Town (Asia) Holdings Limited Zhang Dafan Chairman
Hong Kong, 17 June 2021
As at the date of this announcement, the Board comprises seven Directors, namely: Mr. Zhang Dafan, Ms. Xie Mei and Mr. Lin Kaihua as executive Directors; Mr. Wang Wenjin as non-executive Director; Ms. Wong Wai Ling, Professor Lam Sing Kwong Simon and Mr. Chu Wing Yiu as independent non-executive Directors.
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