Fosun signed an agreement with Zhongrong Trust to acquire 50% stake in Shanghai’s Bund Financial Center for 6.342 billion yuan

2022-05-15 0 By

On March 21, Fosun signed an agreement with Zhongrong Trust To acquire 50% of the company that owns the Bund Financial Center (BFC) in Shanghai for 6.342 billion yuan in cash, making it a 100% holding company of Fosun International.On March 21, An indirect wholly-owned subsidiary of Fosun International signed an agreement with Zhongrong International Trust Co., Ltd. to acquire 50% of the equity of the property owner of Shanghai Bund Financial Center (BFC) for 6.342 billion yuan in cash, making it a 100% holding company of Fosun International, “so as to create a commercial complex project more in line with the group’s ecology”.It is worth noting that the plot where BFC is located was once the “land king” of Shanghai more than ten years ago, and was the object of contention between Fosun International and SOHO China in the “Land King of Shanghai’s Bund” case, and also involved Shanghai Zendai, Greentown China and other well-known real estate companies.After several years, SOHO China finally withdrew from the equity competition, AND BFC fell to Fosun.According to the announcement of Fosun International, the buyer zhejiang Fosun Commercial Development Co., LTD. (an indirect wholly owned subsidiary of Fosun International) and the seller Zhongrong Trust signed the equity transfer agreement on March 21.The buyer agrees to acquire and the seller agrees to sell 50% interest in the target company, Shanghai Fosun Bund Real Estate Co., LTD., at a price of approximately RMB 6.342 billion, to be paid in cash by the buyer through a combination of its own funds, shareholder borrowings and/or external financing.Fosun Bund is currently 50-50 owned by Fosun International and Zhongrong Trust. The only property held by Fosun Bund is the Shanghai Overseas Beach Financial Center (BFC) property.According to the property valuation report, as of December 31, 2021, the value of BFC properties was approximately RMB 23.078 billion.As the main business of the target company is holding BFC properties, by the end of 2021, the total unaudited assets and net assets of the target company are 24.3 billion yuan and 12.684 billion yuan respectively.The target company’s net profit before tax in 2020 is 1.069 billion yuan, and 507 million yuan in 2021.Fosun international said that the target company owns BFC, a landmark property of high quality on the Bund, which is located on Zhongshan Second Road, Huangpu District, Shanghai, China. BFC has a total floor area of more than 420,000 square meters and integrates office, retail, catering, entertainment, health, art and tourism.With huangpu River in the east and Yu Garden Mall in the west, it is the “Honeycomb” project created by the group.After the transaction, Fosun will indirectly own 100 percent of the target company to create a commercial complex project more in line with the group’s ecology, the statement said.The directors (including the independent non-executive directors) are of the opinion that the Share transfer Agreement and the terms of the transaction are fair and reasonable and in the overall interest of the Company and its shareholders.From the seller’s side, zhongrong Trust was founded in 1993 in China and is mainly engaged in trust and asset management, as well as providing related financial services, with more than 800 billion yuan in assets under management, the statement said.The shares of Zhongrong Trust are 37.47% and 32.99% respectively held by Jingwei Textile Machinery co., Ltd. and Zhongrong Enterprise Group Co., LTD., which are listed on A-shares. The remaining shareholders hold less than 30% of the shares of Zhongrong Trust.The largest shareholder of Zhongrong Trust is Jingwei Textile Machinery Co., LTD. The beneficial owner of Jingwei Textile Machinery Is China National Machinery Industry Corporation LTD., which is wholly owned by The State Council.The plot where the Bund Financial Center is located was the “land king” of Shanghai more than a decade ago, and fosun International and SOHO China fought over the “land King” of Shanghai’s Bund.In February 2010, plot 8-1 of Shanghai’s Bund was acquired by Shanghai Zendai At a price of 9.22 billion yuan, making it the most expensive government-sold plot in Shanghai at that time.However, Shanghai Zendai, which won the land king, had only 500 million yuan in its books at the time, and its total bank deposits and net assets amounted to just 3 billion yuan, according to the tender.Under financial pressure, Shanghai Zendai sold the land to Shanghai Haizimen Real Estate Investment Management Co., LTD., and Haizimen was held by Zhejiang Fosun, Shanghai Zendai and Hangzhou Greentown respectively.After the completion of the transaction, Fosun International, which holds 50% of the shares, becomes the actual controlling shareholder of the Bund 8-1 block.Soon after, SOHO China announced that it would buy a 50 percent stake in the project from Shanghai Zendai and Hangzhou Greentown for 4 billion yuan.This caused fosun International to strongly oppose, believing that the three parties of the transaction violated its pre-emptive right as a major shareholder, and appealed to the court for nullification of the transaction.In April 2013, Shanghai No. 1 Intermediate People’s Court ruled in favor of fosun International, and SOHO China, Greentown and Shanghai Zendai issued a joint statement on the trial result, announcing that they would appeal.In September 2015, SOHO China and Fosun International both issued an announcement announcing the shareholder agreement to restructure Haimen.After the restructuring, SOHO China exited and Fosun International, through Shanghai Zindai Bund International Financial Services Center Real Estate Co., LTD. (formerly Known as Fosun Bund), held the entire stake in the Bund 8-1 plot.On March 28, 2019, Zhongrong Trust became the 50% shareholder of Fosun Bund in the form of subscription contribution, according to Tianyan Data.On December 12, 2019, BFC Bund Financial Center officially opened for business.The total construction area is about 420,000 square meters, including 182,000 square meters of super Grade A office building, including two twin towers of 180 meters and three single-family office buildings.In addition, the shopping center is about 96,000 square meters, the Fosun Art Center is about 4,000 square meters, and the Wanda Ruihua Hotel is about 30,000 square meters.