According to Zhitong Finance App, CHEVALIER INT'L (00025) announced that on March 28, 2024, CIHL shareholders (Lofty Ideal Limited, the company's indirect wholly-owned subsidiary) and WO shareholders (including) WO shareholders (indirect wholly-owned subsidiaries and independent third parties of Hongan Real Estate) entered into a joint venture to implement the project. The joint venture was later established in accordance with the terms of the joint venture agreement, and CIHL shareholders held 50% and WO shareholders held 50% of its shares.

The project involved the redevelopment of the property and the subsequent sale of its reconstructed units. According to the joint venture agreement, on March 28, 2024, the joint venture (as the buyer) entered into a conditional sales agreement with WO seller (an indirect wholly-owned subsidiary of Hongan Real Estate and an independent third party), involving the acquisition of all issued shares of the holding company that indirectly held the property and all loans owed by the project company to the WO seller. The total initial cost was HK$797 million (adjusted according to the terms of the sale agreement). According to the terms of the sale agreement, it is anticipated that the acquisition will be completed ten working days after all the prerequisites specified therein have been met. The final deadline for meeting the prerequisites under the sale agreement is June 17, 2024 (postponed by mutual agreement).

Upon completion of the proposed acquisition under the sale agreement, the property will be held by the joint venture group, which will handle and execute the project in accordance with the terms of the joint venture agreement.

According to the joint venture agreement, unless the joint venture partners agree, the joint venture partners shall inject the capital requirements of the joint venture group according to their respective shareholding ratio (i.e. 50:50). According to the terms of the joint venture agreement, all capital requirements for acquisition costs (including costs payable by the joint venture company under the sales agreement) shall first be paid through shareholder loans, while all capital requirements for project costs shall first be paid through external loans. CIHL Group's financial commitment to the project under the joint venture agreement is expected to be disbursed from CIHL Group's internal resources.

The directors believe that CIHL Group's participation in the project through a joint venture will help CIHL Group expand its land reserves for property development and enhance its position as a property developer in Hong Kong. The joint venture will also provide synergy for the project, allowing CIHL Group and WO Group to share their resources, expertise and experience in property construction and development.