Cosco Shipping International (Hong Kong) Co (HKG:0517) wholly-owned subsidiary Yuantong has acquired the remaining 49% equity interest in Yuan Hua for $292,524, making Yuan Hua a wholly-owned subsidiary.
The related party acquisition, funded through Yuantong's internal resources, will be completed within 10 business days after closing, according to its Monday filing.
The valuation of Yuan Hua, at $596,988 for 100% equity, was determined through arm's length negotiations considering its past performance and strategic benefits.
Post-closing, Yuantong will repay a US$343,000 shareholder loan to the seller, and existing service agreements with the seller will remain for six months.
As a wholly-owned subsidiary of Cosco Shipping, the seller is considered an associate and a connected person of the company under the Listing Rules.
The acquisition aims to enhance Yuan Hua's service level and profitability in North America, aligning with the company's strategy to improve its spare parts supply and technical services in the region.
The board considers the acquisition terms fair and beneficial for the company and its shareholders, with no directors having a material interest requiring abstention from voting.
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