August 16 -- Shandong Chenming Paper Holdings’ (000488) subsidiary, Jilin Chenming Paper, received relocation compensation of 2.2 billion yuan, reports National Business Daily, citing the company’s announcement.

Jilin Chengming has to relocate from its current location in line regulations of the municipal government, and China Development Jilin Investment (Jilin Investment) will pay the company 2.2 billion yuan to compensate for the move.

Specifically, Jilin Investment will 660 pay million after Jilin Chenming signs a relocation agreement and will hand over another 660 million after construction on the new plant begins. The remaining 880 million will be paid after the new plant is complete, the source said.

The Jilin municipal government will give Jilin Chenming a quota of 666,666 square meters of construction land and will allow the firm to pay a land transfer fee of 150 yuan per square meter. The company will have land use rights of 50 years. The new plant will be located in Jinzhu Industrial Area, and construction begins next March. Jilin Chenming expects the facility to be complete by the end of 2013.

Jilin Chenming will be able to update its production facilities in the new plant. The relocation compensation is now booked in a special payable account, and the money will be booked as operating income until some point between the beginning of 2013 and 2014.