China Properties Developments, a leading developer of high-end residential, commercial and office real estate in the city of Xi'an, announced that the company recently entered into a revised agreement to acquire a 90% equity interest in Shaanxi Xinyuan Real Estate Company.
Ping'an Wu, chairman, president and CEO of China Properties Developments said, "We are proud to announce the revised agreement to acquire Shaanxi Xinyuan Real Estate Co. The Yan-Ta Shopping Mall project is a landmark property in Xiâ€™an and we are excited about the opportunity to complete construction of this state of the art facility."
On June 13, 2007, China Properties terminated its February 16, 2006, agreement with the shareholders of Shaanxi Xinyuan and entered into a new share subscription agreement with Shaanxi Xinyuan, a Chinese limited liability corporation, pursuant to which China Properties has agreed to acquire new treasury stock from Shaanxi Xinyuan which shall provide China Properties with 90% equity ownership of Shaanxi Xinyuan. The total purchase price for the share acquisition is RMB230 million.
The parties have agreed that the obligation of China Properties to purchase the shares is subject to China Properties obtaining equity or debt financing for the full amount of the purchase price. There is no assurance that such financing will be obtained by China Properties on acceptable terms. The agreement may be terminated by either party in the event closing has not occurred within 240 days of the signing of the agreement. Assuming the closing of the transaction, Shaanxi Xinyuan will become a 90% owned subsidiary of China Properties. The use of proceeds from the US$30 million share issuance by Shaanxi Xinyuan will be to fund a portion of the costs of the construction of Phase II of the Yan-Ta Shopping Mall.