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Debao unit forms JV for land development, urban renewal in China
DEBAO Property Development's subsidiary, Guangdong Debao Real Estate Investment, has inked a joint venture (JV) agreement with three parties.
The JV company will develop land in Foshan city, China, as well as obtain property projects in Foshan including the urban renewal of Li Yong Village on Shi Wan Street, Debao said on Monday.
The other JV partners are Shenzhen Cai Xin Development and Investment, Foshan Nanhai Debao Jixian Investment, and Foshan Cai Xing Real Estate. They are independent third parties unrelated to Debao, its directors, controlling shareholders or associates.
Shenzhen Cai Xin will take a 40 per cent stake in the JV firm, while the others including Debao's subsidiary will hold 20 per cent each.
Debao's board believes that the JV will add value to the group's existing property business and is in line with its plans to expand the business through acquisitions, JVs or strategic alliances. The JV will also improve Debao's overall financial position, the company said.
The incorporation of the JV firm and Debao's subscription in it will be funded by internal resources, and are not expected to have any material impact on Debao's earnings per share or net tangible assets per share for the fiscal year ending Dec 31, 2019.
The JV company will be incorporated for the purpose of acquiring all the shares or to obtain a controlling interest in Foshan Hong Yuan Investment (FHYI), and to obtain the rights under the land development contract between FHYI and the Poyang Joint Stock Economic Association of Shiwan town in Chancheng district of Foshan city as well as the use of land and development rights to carry out the business.
The JV agreement will be terminated if the JV company has not signed any agreements relating to the acquisition of the land and development rights or obtained the property projects by Dec 12, 2022.
Shares in Debao last traded at 9.5 Singapore cents on Nov 12, up 3.3 cents.