Central China Real Estate (HKG:0832) announces CCRE China, an indirect wholly owned subsidiary of the company, entered into the cooperation agreement with Bridge Trust. Pursuant to the cooperation agreement, among others, Bridge Trust shall establish trusts with aggregate trust capital of up to RMB900 million (HK$1.111 billion); and CCRE China shall provide the guarantee on return.

The maximum duration of the trust shall be 5 years from the trust establishment date. Upon expiry of the third anniversary of the trust establishment sate, CCRE China shall have the sole discretion to extend the duration of the trust for one year.

It is intended by the parties that the trust capital will principally be used to invest in the development of the existing or new property development projects of the group by way of acquisition of or capital injection into the group’s existing project companies or establishment of new project companies jointly held with CCRE China provided that the trust’s equity holding in each of such project companies shall not exceed 50%. Within the first six months upon establishment of the trust, the trust capital may be advanced to CCRE China or its subsidiaries as interest-bearing loans.

The board considers that the entering into of the cooperation agreement and the
transactions contemplated thereunder will enhance the cashflow position of the group and will help the company to raise capital as well as the development of the existing and future property development projects of the group