On January 3, Gelonghui announced that SMART GLOBE (01481.HK) has completed an acquisition matter after the conditions precedent under the sales agreement were fulfilled. This agreement follows the consent of the state (referring to the President of Zambia, whose approval for the transfer of the land was issued through the Zambian Ministry of Lands) to transfer the land, and after Heng Qu received property transfer tax receipts and payment certificates issued by the Zambian Revenue Authority on December 21 and December 22, 2024, which were one of the prerequisites for completing the acquisition. Therefore, the acquisition was completed on January 3, 2025. After the completion of the acquisition (and before the completion of the share subscription matter), the land is owned by Tera Logistics, which is fully owned by Huge Cheer (the company's indirect wholly-owned subsidiary).
After the completion of the acquisition, all conditions precedent under the share subscription agreement have been met. According to the terms of the sales agreement, HKD 5,425,000 (equivalent to USD 700,000) has been used for the payment of the subscription amount for the share subscription, and the share subscription was completed on January 3, 2025.
The price and amount of the subscription shares were determined by the parties to the share subscription agreement after fair negotiation based on normal commercial terms, referencing (including) (i) after the completion of the acquisition, Huge Cheer will become the indirect owner of the land; (ii) after the completion of the acquisition, the land will be the only significant asset of Tera Logistics (fully owned by Huge Cheer); (iii) after the completion of the acquisition, Huge Cheer’s only significant asset will be its investment in Tera Logistics; (iv) the investment potential of the land after the acquisition; and (v) the arrangement under the sales agreement, that is, HKD 5,425,000 will be used to pay for the subscription amount under the share subscription agreement, accounting for approximately 20% of the total cost of the acquisition, which corresponds to 20% of the total number of shares issued after the share subscription by Huge Cheer.
Following the completion of the acquisition and share subscription, the Group’s shareholding ratio in Huge Cheer decreased from 100% to 80%. Huge Cheer (which owns the land through Tera Logistics) becomes an indirect non-wholly-owned subsidiary of the company, and its financial performance will continue to be consolidated into the company’s financial statements. The company intends to use the funds raised from the share subscription (together with the funds from the bond subscription) as general working capital for its logistics business.
On the same day, it was announced that after the completion of the acquisition and the share subscription (which is part of the conditions precedent for completing the bond subscription), all conditions precedent under the bond subscription agreement have been met. According to the terms of the sales agreement, HKD 20,100,000 (equivalent to approximately USD 2,593,548) has been used for the payment of the subscription amount for the bond subscription, and the bond subscription was completed on January 3, 2025. The amount of HKD 20,100,000 for the convertible bonds was issued to DCQ according to the terms and conditions of the bond subscription agreement. The company intends to use the funds raised from the bond subscription (together with the funds from the share subscription) as general working capital for its logistics business.
