Business Times: Fri, Jul 13
PAN Hong Property Group has set its eyes on raising its profile in Huzhou city of China's Zhejiang province, announcing yesterday the acquisition of a 30 per cent stake in a property development and property management services company there.
The group, through subsidiary Huzhou Luzhou Housing and Landing Development, is buying the 30 per cent stake in Huzhou Delong Real Estate for six million yuan (S$1.2 million). This will be funded internally.
Huzhou Delong has a net book value of 19.6 million yuan as at June 30, 2012. The purchase consideration, on a willing-buyer-and-willing-seller basis, took into consideration the book value and the development potential of a land parcel owned by Huzhou Delong.
The land parcel, with a site area of 54,452 square metres, is located at the tourist destination of Taihu Meixi in the Huzhou Development Zone in Zhejiang province.
"The company believes that the acquisition will enable the group to acquire an interest in a strategically located land parcel for future development, and strengthen its brand in Huzhou city of Zhejiang province," said Pan Hong.
The stake vendor, Zhejiang Fengjing Metal Materials Co Ltd, will have a remaining 20 per cent stake in Huzhou Delong after selling the 30 per cent stake to Pan Hong. It will transfer this remaining 20 per cent equally to two individuals Zhang Sheng Wen and Huang Shun Mei. The other stake holders of Huzhou Delong are Vitoria (Huzhou) Garment Co Ltd (34 per cent) and Huzhou De Tai Shun Trading Co Ltd (16 per cent).
The company posted a lower profit for the fiscal year ended March 31 as a result of a sharp 85.5 per cent fall in revenue from its Zhejiang operations.
Pan Hong shares were last traded at 27.5 cents.
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