Nine Dragons subsidiary enters JV agreement with affiliated company to purchase office space in Kowloon, Hong Kong, for HK$253.6M; company says its current office does not meet its operational needs and has sought alternative space for proposed expansion
April 4, 2014
– On 4 April 2014, Master Pace, a wholly-owned subsidiary of the Company, and Newton Properties entered into the Agreement pursuant to which the parties agreed to subscribe for shares in the Joint Venture for the purpose of holding the Purchaser, which will acquire the Property.
The purchase price of the Property is HK$253,636,000. The Property is an entire floor at the high zone of the development located at 181 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong, together with 7 car parks, which will be used by the Company as offices and investment purposes.
The Joint Venture will be held as to 50:50% by Master Pace and Newton Properties. The aggregate capital commitment and shareholders’ loan to be provided by Master Pace and Newton Properties to the Joint Venture to finance the Purchaser for the purchase of the Property will be HK$175,200,000. The balance of the consideration for the purchase of the Property will be satisfied by way of a mortgage loan to be taken out by the Purchaser.
Newton Properties is wholly-owned by the Controlling Shareholders and is hence a connected person of the Company. Accordingly, the entering into of the Agreement constitutes a connected transaction for the Company. As the applicable percentage ratios in respect of the capital commitment and shareholders’ loan to be provided by Master Pace pursuant to the Agreement is more than 0.1% but less than 5%, the Agreement will be subject to the reporting and announcement requirements but exempted from the independent shareholders’ approval requirement of Chapter 14A of the Listing Rules.
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Industry Intelligence Inc. editor's note: Nine Dragons Paper (Holdings) Ltd. indicated in the press release that its current office located in Wanchai is insufficient to meet the group’s operational requirements and has been searching for alternative space for the proposed expansion.