Opinion Real Estate Network News: August 25th,Hefei urban construction developmentThe company announced that it plans to issue 180 million shares and purchase 100% of the shares of Hefei Industrial Investment Industrial Technology Development Co., Ltd. held by Hefei Industrial Investment Holdings Co., Ltd., and the transaction consideration for this restructuring was determined to be 1,286 billion yuan; the company will also raise supporting capital, totaling no more than 1 billion yuan, and the number of shares issued is expected to not exceed 154 million shares.

Opinion Real Estate New Media learned that prior to this transaction, after friendly negotiations between the parties involved in the transaction, some assets and liabilities related to public rental housing owned by the target company Industrial Technology were transferred free of charge to the counterparty Industrial Holdings. As of December 31, 2018, the net audited book value of the assets and liabilities related to the free transfer of public rental housing was 134 million yuan; according to tax laws and relevant regulations, the estimated amount of value-added tax on the assets and liabilities related to the free transfer of public rental housing was $9217,800. Furthermore, on June 10, 2019, Industrial Holdings, the sole shareholder of the target company, decided to pay a dividend of 113.2 million yuan on industrial technology using the reference date up to December 31, 2018.

According to the “Agreement on Issuing Shares to Purchase Assets” and the “Supplementary Agreement to Purchase Assets by Issuing Shares” signed by the parties to the transaction, the transaction price of the underlying asset was determined to be 1,286 billion yuan after deducting the net book value of the free transfer of public rental housing, the amount of value-added tax fees and dividends. Hefei Urban Construction will pay the full transaction consideration for this restructuring by issuing shares. If the value-added tax generated by the free transfer of public rental housing exceeds the estimated amount of RMB 9.217,800, the difference will be covered by the cash from Industrial Holdings to Hefei Urban Construction. The price of the assets to be purchased in this transaction will not be adjusted as a result; if not exceeded, Hefei Urban Construction will enjoy it.

According to reports, Hefei Urban Construction paid the full transaction consideration for this restructuring by issuing shares. The price of the shares issued this time was 7.14 yuan/share, and the number of shares issued was 180 million shares.

In addition, Hefei Urban Construction plans to use an inquiry method to raise supporting capital from non-public shares issued by no more than 35 specific investors. The total amount of supporting financing is no more than 1 billion yuan, not more than 100% of the asset purchase transaction price of the shares issued; moreover, the number of shares issued is expected to be no more than 154 million shares, not more than 30% of the total share capital before issuance (512 million shares). The final distribution quantity is determined in accordance with the relevant provisions of the “Distribution Management Measures” and based on the results of the inquiry.

The total number of new shares added this time is 111 million. Zhongdeng Company accepted the registration application for the shares issued by Hefei Urban Construction on August 12, 2020. After the relevant shares are registered, they will be officially included in the shareholder register of the listed company. The nature of the additional shares raised as supporting capital from the non-public offering is tradable shares with limited conditions of sale. The listing date is August 28, 2020, and the sales limit period is calculated from the date the shares are listed.