Asia-Pacific Strategic Investments has entered into a non-binding framework agreement to sell Huzhou Dixi Gengdu Ecological Agriculture Development and Zhongfang Lianhe Grand Canal Cultural Tourism Group to Bluetown The Spring Blossom Construction Group for 300 million yuan, according to a filing to SGX Wednesday.
The company currently owns 72 percent of Huzhou Agriculture and 78.2 percent of Grand Canal Group, and it expects to acquire the remainder of each within six months, the filing said.
Huzhou Agriculture and Grand Canal Group — the target entities — own and operate a 113-room hotel, Anatole by Landison Hotel, in Huzhou, Zhejinag Province, and it leases 320 hectares of agricultural land in Huzhou, 62 hectares of which it plans to convert into an integrated project called Project Phoenix, the filing said.
The target will acquire at least 400 mu, or around 26.67 hectares, of Project Phoenix land use rights for residential development, the filing said.
Asia-Pacific Strategic Investments said the disposal will allow it to unlock the value of the target’s assets.
“With the net proceeds, the group will have more working capital to fund and diversify its agriculture business and undertake new real estate projects and other opportunities that may arise in the future,” Asia-Pacific Strategic said, noting it has earmarked around 1,100 mu, or around 73.3 hectares, of the land for the agriculture business.
The agricultural land has an initial lease term which will expire at end-2028, and which is renewable through end-2062, the filing said.
China-based Bluetown The Spring Blossom Construction, a subsidiary of property developer Bluetown Group, is a real estate developer, the filing said.
If the deal materializes, it will require the approval of Asia-Pacific Strategic’s shareholders in an extraordinary general meeting (EGM), both for the disposal and for the company’s move into the agricultural business, the filing said.