(Hong Kong, 22 November 2009) Glorious Property Holdings Limited ("Glorious Property" or the "Company", together with its subsidiaries, the "Group", HKEx stock code: 00845), the leading Shanghai-based property developer focusing on development and sale of high quality properties in key economic cities in China, is pleased to announce that the Company has reached an agreement to acquire two large scale premium land parcels in Xu Jia Hui District, Shanghai for a total consideration of RMB2 billion (approximately HK$2.27 billion), thereby reinforcing its leading position in the economic capital.
According to the agreement signed on 20 November, through an indirect wholly owned subsidiary Wuxi Wangjiarui Co., Ltd., the Company will acquire from Jiangsu Rongsheng Shipbuilding Co. Ltd. ("the Vendor") project companies that hold the two premium land parcels in Shanghai. The first one is located at No. 143 Xu Jia Hui Road, west of Cao Xi North Road and north of Huating Hotel and occupies a site area of about 26,221.8 sq.m., with a plot ratio of 2.5 times. The second one is located at No. 292 Cao He Jing Road, east of Cao Xi North Road, west of the planned Cao East Road, north of the No. 3 metro line and south of Zhongshan South Second Road and occupies a site area of about 17,610.9 sq.m., with a plot ratio of 4.23 times.
The Company intends to develop a large-scale commercial project on these two sites, comprising high quality office buildings, service apartments, hotel and other ancillary facilities.
Commenting on this acquisition, Mr. Cheng Li Xiong, CEO of Glorious Property, said: "This acquisition is an excellent opportunity for us to acquire two large land parcels located in Xu Jia Hui District, a prime location in the central business district of Shanghai, at a reasonable price. The acquisition facilitates the implementation of our strategy of diversifying the Group’s long-term earnings base through development of investment properties. We believe that the acquisition and the forthcoming developments on the sites will have a positive impact on the revenue and earning prospects of the Group in the long term."
"Driven by strong economic growth, increasing level of foreign investment and expansion of the service industry in China, the commercial properties sector in China has demonstrated enormous growth potentials. Given the excellent prospects in this sector, coupled with limited land supply in prime locations in the Shanghai central business district, we expect that there will be strong demand from international and domestic investors for the high quality commercial properties to be developed on these two sites," Mr. Cheng added.
The Directors of Glorious Property consider that the terms of this acquisition are on normal commercial terms, fair and reasonable and in the interests of the Company and its shareholders as a whole. The consideration will be funded by internal resources and/or bank financing.
Mr. Zhang Zhi Rong is a Director of the Company and holds the entire issued capital of Best Era International Limited ("Best Era") which is in turn the ultimate controlling shareholder of the Company. Mr. Zhang is also an indirect controlling shareholder of the Vendor. The value of the acquisition has also exceeded 5% but is still within 25% of the value of the Company"s consolidated total assets. This acquisition therefore constitutes a discloseable and connected transaction under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, and is subject to the reporting, announcement and independent shareholders' approval requirements.
The acquisition will be subject to approval by the Company's shareholders in an extraordinary general meeting to be held on a later date. Best Era and its respective associates will abstain from voting at the meeting.
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