TIANJIN Top Spring Tian Gui Equity Investment Funds Partnership (Tianjin Top Spring Tian Gui) has, pursuant to a capital increase agreement, agreed to make a capital contribution in the amount of HK$26.16 million in cash to the registered capital of Top Spring Real Estate (Shenzhen) Co., Ltd., a company wholly owned by Top Spring International (TSI), TSI said.
Upon completion of the capital contribution, the equity interests held by the TSI group in Top Spring Real Estate (Shenzhen) will be diluted from 100% to 92.44%. Such dilution of equity interests will constitute a deemed disposal of Top Spring Real Estate (Shenzhen) under the Listing Rules.
In connection with the management of Top Spring Real Estate (Shenzhen), TSI and Tianjin Top Spring Tian Gui intend to enter into a JV agreement relating to Top Spring Real Estate (Shenzhen).
Pursuant to the capital increase agreement, TSI has agreed to provide incentive fees to Tianjin Top Spring Tian Gui. The amount of the incentive fees will be determined with reference to the average selling price per sq.m. of the residential properties of Phase IV of the Spring Land project in Bao'an District, Shenzhen, which is in the process of being developed by Top Spring Real Estate (Shenzhen) (the Property Development Project) and an agreed percentage of the actual saleable revenue derived from the Property Development Project.
Under the capital increase agreement, Tianjin Top Spring Tian Gui has agreed to sell to TSI 7.56% of the equity interests in Top Spring Real Estate (Shenzhen) (the Equity Interests), upon the fulfilment of any of the conditions as set out in the capital increase agreement, for cash at the maximum consideration of RMB121.77 million (HK$148.56 million). Such conditions include 85% of the aggregate saleable area of the Property Development Project has been sold.
On 16 December 2011, Tianjin Top Spring Tian Gui agreed to provide a loan in the amount of RMB193.473 million to Top Spring Real Estate (Shenzhen). TSI has entered into a guarantee for a total amount of RMB300 million in favour of Tianjin Top Spring Tian Gui to guarantee the payment and performance when due of all obligations of Top Spring Real Estate (Shenzhen) under the loan agreement.
Apart from owning the land where the Property Development Project is located, Top Spring Real Estate (Shenzhen) also owned two other parcels of land in the PRC.