Gelonghui, April 14, 丨 Yutian China (00313.HK) announced that on April 14, 2023, (i) the seller, Yujing Holdings Co., Ltd. (a wholly-owned subsidiary of the Company), (ii) the buyer, Heilongjiang Fenglin Investment Co., Ltd., (iii) Qinhuangdao Arirang, and (iv) the project company entered into a cooperation agreement, according to which the buyer and seller agreed to cooperate in developing the Qinhuangdao project.
According to the cooperation agreement, the seller agreed to transfer the interest to be sold to Qinhuangdao Arirang (30% of the project company's shares) at a cost of 1.2 million US dollars. As part of the arrangement under the cooperation agreement, the seller and Qinhuangdao Arirang signed an equity transfer agreement on the same day to set out the terms of the sale.
The project company is a company incorporated in China, mainly engaged in the development of the Qinhuangdao project. The Qinhuangdao project refers to a coastal shopping, tourism and health vacation complex developed by the Group in Qinhuangdao, China, integrating high-end hot spring resorts, high-end hospitals, health care, culture and entertainment, leisure and vacation, while also operating an outlet business. The total planned construction area of the Qinhuangdao project is 672,110 square meters, while the group completed only part of the first phase of the project (the total construction area is about 163,227 square meters).
It is expected that significant investment will be required to complete the development of the entire Qinhuangdao project. Furthermore, given the difficult business environment in China's real estate industry in recent years, the development of the Qinhuangdao project has been adversely affected. Given the project company's current financial situation, it is difficult for the Group to continue to raise additional debt financing to support the future development of the Qinhuangdao project. Through the cooperation agreement, the buyer and Qinhuangdao Arirang (as a new investor) have promised to provide the necessary funding for the overall development of the Qinhuangdao project. The funds will also be used to repay the project company's debts and liabilities. As part of the cooperation, the group has agreed to sell the interest for sale to Qinhuangdao Arirang (30% of the project company's interest). The company believes that the relevant cooperation with the buyer and Qinhuangdao Arirang will help the group continue to develop the Qinhuangdao project, while at the same time using the funds provided by the buyer and Qinhuangdao Arirang to return its financial situation to a relatively good state after repaying the project company's debts and liabilities.