ZHIXIN GP HLDG (ASX: 02187) has announced a significant divestment agreement. Following the close of trading on June 26, 2026, the seller, Xiamen Zhixin Building Materials Group Co., Ltd., which is a wholly-owned subsidiary of the company, entered into a sale and purchase agreement with the buyer, Xiamen Special Zone Construction Investment Building Materials Co., Ltd.
The company itself acted as the guarantor for this transaction. Under the terms of the agreement, the seller conditionally agreed to dispose of, and the buyer conditionally agreed to acquire, the entire equity interest in the target company, Xiamen Zhixin New Materials Co., Ltd. The total consideration for this transaction is set at RMB 46.662 million, which is approximately equivalent to HKD 54 million.
The target company was established by the group in China with the sole purpose of holding the group's primary ready-mix concrete production facilities and other supporting assets. These assets primarily consist of the property located at No. 55 Guankou Avenue, Jimei District, Xiamen City, Fujian Province, China, which includes the land and the buildings constructed thereon. Additionally, the assets encompass the ready-mix concrete production lines, plant and equipment, as well as logistics and other supporting assets such as trucks, office equipment, qualifications, and licenses.
The board of directors believes that this disposal presents a valuable opportunity for the group. It allows the group to realize a satisfactory return on these assets, consolidate financial resources for the development of environmentally friendly and lightweight building products or other more favorable opportunities, and ultimately improve the group's overall cash flow and financial position. The directors, including the independent non-executive directors, consider the terms of the sale and purchase agreement to be fair and reasonable, concluded on normal commercial terms. They are of the view that the disposal is in the overall interests of the company and its shareholders.