Gelonghui on December 13th, the development of VANDA HOTEL (00169.HK) announced that on December 13, 2019, the company (as seller) had entered into a sale and purchase agreement with Zhizun Holdings Limited (as buyer), under which the company conditionally agreed to sellTarget companyAmazing Wise Limited is about 53 per cent owned, with a total consideration of HK $2 million. Chen Changwei, who is the beneficial owner of all the issued share capital of the Purchaser, is the responsible guarantor of the Purchaser under the Sale and purchase Agreement.
As at the date of the announcement, the target company is a subsidiary of the company, which indirectly holds a 100% interest in Hengli City. The target company is a limited company incorporated in the British Virgin Islands. As at the date of the announcement, the target company is 53% owned by the company and 47% owned by the buyer, while the buyer is wholly owned by Chen Changwei.
The business of Amazing Wise Limited, the target company, is to hold, operate and manage Hengli City. Hengli City is a comprehensive residential, office and retail project located in the core financial district of Fuzhou.
The announcement said that, as previously announced, the Group's strategic focus is shifting to the charging business to improve cash flow and reduce leverage by cashing out previous property investment projects, leveraging the company's hotel management expertise and evaluating future plans for the Hengli City project. After evaluating the company's business, the company considers that the sale of Hengli City is in line with the Group's strategy and has taken into account the company's assessment of the business prospects of the target company and its subsidiaries in 2020 as well as the overall market conditions of property investment in China, it will be more beneficial for the company to concentrate its resources on the development of its fee-paying hotel management business. The net proceeds from the disposal will be used by the Group as its general working capital.