QiongHua High-Tech to become property firm

Sep. 21, 2009 (China Knowledge) - JiangSu QiongHua High-Tech Co Ltd<002002> today announced that it will sell all its assets and debts to parent JiangSu QiongHua Group and will acquire a property subsidiary of Jiangsu Guoxin Investment Group Ltd by a share issuance, sources reported.

The Shenzhen-listed company, which suspended trading on Aug. 19, has total assets valued at RMB 182 million.

According to the contract signed among the three firms on Sep. 16, JiangSu QiongHua will pay cash for the assets. If JiangSu QiongHu is unable to raise enough funds, Jiangsu Guoxin Investment will provide financing or will offer a guarantee for the financing of JiangSu QiongHu.

JiangSu QiongHua High-Tech will issue up to 600 million shares for RMB 6.49 per share to Jiangsu Guoxin Investment in exchange for a 100% stake in Guoxin Property, one of the latter firm's subsidiaries.

As of Sep. 21, Guoxin Property had a registered capital of RMB 550 million and unaudited net profit attributable to shareholders' was RMB 1.28 billion. Its net assets were valued at RMB 3.9 billion.

Guoxin Property currently has 16 real estate projects, nine of which are under construction. The projects under construction will have a floor area of 3.07 million square meters, and 2.56 million sq m are already on the market. As of the end of July, the firm had land reserves of about 9,000 Mu or 3.4 million sq m of potential floor area.