Hon Kwok Land Investment Co. Ltd. and Chinney Investments Ltd. jointly announced that there would be a further delay in the distribution of circulars related to a sale and purchase agreement involving both companies and Sunshine City Group Co. Ltd.
The dispatch of circulars was originally scheduled on or before March 4. Han Kwok and Chinney Investments then announced March 3 that the circulars were to be released on or before March 31 because additional time was required to finalize some information included in the notice. The latest announcement states that the distribution date of the circulars will be further postponed to on or before April 29, citing the same reason.
According to a Jan. 24 filing, Hon Kwok's wholly owned indirect subsidiary Cheerworld Group Ltd., agreed to sell three land parcels in Guangzhou, China, for 3.18 billion Chinese yuan by divesting its shares in Smooth Ever Investments Ltd., a company that indirectly owns the properties. The agreement also requires Sunshine City to take on onshore and offshore loans payable by Smooth Ever Investments.
If the terms of the agreement are approved as they are, Hon Kwok Group is expected to earn an estimated net gain of around HK$2.20 billion from the deal while Chinney Investments Group is expected to rake in HK$1.50 billion.
Hon Kwon Group intends to use its share of net sale proceeds for the repayment of outstanding bank loans and as general working capital.
As of March 31, US$1 was equivalent to 6.89 Chinese yuan.