Announcement on Signing the Supplementary Agreement to the Equity Transfer Agreement of Jiaxing Laihong Sports Culture Co., Ltd.
The company and its board of directors guarantee the truthfulness, accuracy, and completeness of the information disclosed, and that there are no false representations, misleading statements, or material omissions.
I. Overview of the Transaction
Chengdu New Tianfu Cultural Tourism Development Co., Ltd. (hereinafter referred to as the "Company") held the tenth meeting of the ninth board of directors on June 10, 2019, and reviewed and approved the "Proposal on the Company's Transfer of Equity in a Controlled Subsidiary and Related Party Transaction." The proposal agreed that the Company would transfer its 55% equity in Jiaxing Laihong Sports Culture Co., Ltd. (hereinafter referred to as "Jiaxing Laihong Sports") to Hongxiang Holding Group Co., Ltd. (hereinafter referred to as "Hongxiang Holding Group") at a transfer price of RMB 56,432,773.61. After the transaction, the Company would no longer hold any equity in Jiaxing Laihong Sports. On the same day, the Company signed the "Equity Transfer Agreement for Jiaxing Laihong Sports Culture Co., Ltd." (hereinafter referred to as the "Equity Transfer Agreement") and the "Guarantee Agreement" with Hongxiang Holding Group. On June 17, 2019, Jiaxing Laihong Sports completed the industrial and commercial registration change procedures. For details, please refer to the "Announcement on the Company's Transfer of Equity in a Controlled Subsidiary and Related Party Transaction" (Announcement No.: 2019-040) and the "Announcement on the Progress of Industrial and Commercial Registration Change and Related Party Transaction for the Company's Transfer of Equity in a Controlled Subsidiary" (Announcement No.: 2019-042) disclosed by the Company in China Securities Journal, Securities Times, and the CNINFO website (www.cninfo.com.cn).
II. Progress of the Transaction
According to Article 3.3.3 of the "Equity Transfer Agreement," "If Hongxiang Sports fails to pay the equity transfer price for Hong Kong Laihong Xiang Sports Investment Co., Ltd. in full before Hongxiang Holding pays the first installment of the equity transfer price, then Hongxiang Holding's payment to Laiyin Sports shall be postponed accordingly, and it shall not bear any liability for breach of contract or pay interest for the delayed payment period." As this condition was not met, the Company did not receive the full equity transaction price. As of now, the Company has received the first installment of the equity transfer payment of RMB 28,216,386.81 and corresponding interest from Hongxiang Holding Group. The remaining equity transfer payment (including previously due interest) of RMB 30,121,560.92 is still unpaid.
Recently, both parties have mutually agreed that the payment conditions stipulated in the "Equity Transfer Agreement" have been met, and Hongxiang Holding Group should fulfill its remaining payment obligations to the Company. Considering Hongxiang Holding Group's operating and capital turnover situation, after friendly negotiation, the parties signed the "Supplementary Agreement to the Equity Transfer Agreement for Jiaxing Laihong Sports Culture Co., Ltd." (hereinafter referred to as the "Supplementary Agreement"), whereby Hongxiang Holding Group will pay the remaining equity transfer price to the Company in installments. At the same time, to ensure the smooth performance of the debt, Hongxiang Holding Group has provided mortgage guarantees for some properties held by its two subsidiaries, Haining Jiuyuan Trading Co., Ltd. and Haining Hongda Real Estate Co., Ltd. Therefore, the Company intends to sign a tripartite "Mortgage Contract" with Hongxiang Holding Group, Haining Jiuyuan Trading Co., Ltd., and Haining Hongda Real Estate Co., Ltd. As of the disclosure date of this announcement, the Company has signed the tripartite "Mortgage Contract" with Hongxiang Holding Group and Haining Hongda Real Estate Co., Ltd.; the "Mortgage Contract" with Hongxiang Holding Group and Haining Jiuyuan Trading Co., Ltd. has not yet been signed.