LIANHUA (00980) announced its intention to sell the entire equity stake of Shanghai Century Lianhua Supermarket Yangpu Co., Ltd. (Yangpu Century Lianhua), held by its wholly-owned subsidiary Shanghai Century Lianhua Supermarket Development Co., Ltd., to Shanghai Dongran Industrial Co., Ltd., an indirect wholly-owned subsidiary of Bailian Group Co., Ltd. The consideration for the proposed sale will be determined based on an independent valuation report filed with the relevant authorities and mutually agreed upon in a formal equity transfer agreement. Yangpu Century Lianhua primarily operates hypermarkets in Yangpu District, Shanghai, and Henan Province.

The board further stated that upon completion of the proposed sale, the company plans to enter into a management arrangement with Shanghai Dongran. Under this arrangement, LIANHUA will provide operational management and resource support services to Yangpu Century Lianhua in accordance with the terms of a formal entrusted management agreement.

The proposed sale aligns with the company's long-term sustainable growth strategy and aims to enhance overall performance. Factors such as market competition, store operations, network value, and supply chain impact were considered in the decision to divest assets, allowing the company to focus on core operations in Shanghai and Zhejiang.

To ensure a smooth transition and stable operations post-sale, the group will leverage its brand, merchandise, and management expertise to oversee Yangpu Century Lianhua under the entrusted management agreement with Shanghai Dongran. Support will include personnel management, branding, IT systems, and product supply to help achieve new operational objectives.