The Hong Kong-listed Golden Eagle Retail Group has published a notice stating that the group will suspend its acquisition of the Shanghai Golden Eagle Shopping Plaza.
At the beginning of November 2008, Golden Eagle Retail Group announced that the company had signed an agreement with the Nanjing Golden Eagle International Group to fully acquire its wholly-owned subsidiary Shanghai Fude Shiji Investment, the owner of the Golden Eagle Shopping Plaza located in Shanghai, for CNY999 million. Golden Eagle Retail Group would pay CNY360 million in cash. At the same time, the group would take over the CNY639 million loan obligations of Nanjing Golden Eagle.
However, Golden Eagle Retail Group said that because of the negative effect of the recent global financial crisis, the two sides had re-evaluated the potential risks related to the acquisition and both sides agreed that the acquisition was not appropriate in the current situation. Therefore, the two sides signed an agreement on December 11, 2008 to terminate the former sale and purchase agreement and neither side asked for compensation from the other side.
At present, the Shanghai Golden Eagle Shopping Plaza is undergoing a renovation. With rents of only CNY3.5 million in 2007, the building is involved in the renovation for most of the time in 2008 and its rents this year are expected to be less than those of the previous year.