Adamas Finance Asia Limited Proposed Disposal (3102T)
04 January 2017 - 8:00PM
UK Regulatory
TIDMADAM
RNS Number : 3102T
Adamas Finance Asia Limited
04 January 2017
Adamas Finance Asia Limited
("ADAM", or the "Company")
PROPOSED DISPOSAL OF INTEREST IN TIAN TONG SHAN VILLA
PROJECT
Adamas Finance Asia Limited announces it has agreed terms for
the sale of its indirect 15% interest in the Tian Tong Shan Villa
Project (the "TTS Project"), a resort development in Fujian
Province, China for a total consideration of up to RMB 113.58
million (approximately US$16.4 million).
Background
Through its wholly owned subsidiary, Lead Winner Limited
("LWL"), ADAM holds a 30% interest in S&T Group Holdings
Limited ("S&T"), which in turn holds a 50% interest in Changtai
Jinhongbang Real Estate Development Co. Limited ("CJRE") and its
resort development project, the TTS Project. ADAM's effective 15%
interest was valued at US$48.4 million in the consolidated balance
sheet at 30 June 2016.
Disposal
Under the terms of an agreement between the shareholders of
S&T, LWL has the option to require Mr. Wang Chun Fang, the
majority indirect holder of CJRE, to purchase shares representing
10% of S&T from LWL for a consideration of RMB 50 million
(approximately US$7.2 million) (the "Put Option"). LWL has
exercised the Put Option and full payment in cash is due within 30
days.
In addition, LWL has entered into a memorandum of understanding
(the "MOU") with Mr. Wang Chun Fang to sell its remaining 20%
holding in S&T (the "Proposed Disposal"). However, it is
anticipated that the sale and purchase agreement relating to the
Proposed Disposal, when executed, will be entered into with R&F
Properties Co. Limited ("R&F"), a Guangzhou-based real estate
developer listed on the Hong Kong Stock Exchange which, it is
envisaged, will purchase the entire share capital of S&T.
Under the terms of the MOU, the agreed consideration for LWL's
20% holding in S&T, which represents 10% of CJRE, is RMB 63.58
million (approximately US$9.2 million).
Payment of RMB 51.58 million (approximately US$7.4 million) of
the total amount due from the Proposed Disposal is expected within
10 days of receipt of the RMB 515.8 million (approximately US$74.2
million) from R&F by Mr. Wang Chun Fang, which is expected to
be received one month following satisfactory completion of
R&F's due diligence. The remaining sum due to LWL of RMB 12
million (approximately US$1.8 million) will be received in cash
through phased payments of 10% of each payment received from Mr.
Wang Chun Fang. Exercise of the Put Option and completion of the
Proposed Disposal is expected to result in a loss on disposal of
approximately US$32 million which the Directors expect will be
recognised in the financial year ended 31 December 2016.
The Company is selling its holding in the TTS project in line
with its investing policy, which involves disposing of the legacy
portfolio acquired in a reverse takeover in February 2014 in order
to invest the funds realised in income-generating financing
opportunities. The objective is for the financing portfolio to
generate cash to enable the Company to pay regular dividends to
shareholders.
ADAM will reinvest the funds received from the exercise of the
Put Option and, assuming completion, the proceeds of the sale to
R&F in accordance with its investing policy under the advice of
its Hong Kong-based investment manager, Adamas Asset Management
(HK) Limited ("Adamas").
ADAM Chairman John Croft said: "The global economy and the
Chinese property market in particular remain sluggish and we have
therefore elected to exercise the Put Option and to enter into the
MOU in order to generate funds to invest in line with our policy.
This marks another step in our progress towards the realisation of
our legacy asset portfolio for reinvestment in high-yield projects.
Although the proceeds represent a substantial discount on book
value, we are working closely with the Adamas team in Hong Kong to
identify investment opportunities similar to those that are
starting to generate attractive returns for the Company."
This announcement includes inside information as defined in
Article 7 of the Market Abuse Regulation No. 596/2014 and is
disclosed in accordance with the Company's obligations under
Article 17 of those Regulations.
Enquiries:
Adamas Finance Asia Limited
John Croft +44 (0) 1825 830587
WH Ireland Limited - Nominated Adviser
+44 (0) 113 394
6600
Tim Feather +44 (0) 117 945
Ed Allsopp 3444
finnCap Limited - Broker
William Marle +44 (0) 20 7220
Grant Bergman 0500
First City Public Relations
(Hong Kong) +852 2854 2666
+44 (0) 743 814
Allan Piper 8968
This information is provided by RNS
The company news service from the London Stock Exchange
END
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