On August 17, 2021, 00482.HK announced that in July 2021, the Group had entered into a cooperation agreement with Guangdong Huasuan International Industrial Park Investment and Development Co., Ltd. Under the cooperation agreement, Huasuan and Zhongshan St. Martin Electronic Components Co., Ltd. (an indirect wholly-owned subsidiary of the Company) will cooperate in upgrading a number of factories and dormitories built on industrial land and rebuilding some of the vacant and undeveloped parts of the land, subject to the prior consent and planning approval of the relevant PRC government departments.
The land is located in Zhongshan City, Guangdong Province, China and is owned by Zhongshan St. Martin. The cooperation agreement aims to develop a framework to rebuild the land as a research and development smart manufacturing center for future leasing or sale. Huasuan will provide funds for the full cost of the reconstruction, while the Group will provide part of the land for reconstruction. The Group and Huasuan will be entitled to receive 20% and 80% of the new buildings on the land respectively by distributing the rental income generated by the new building or the proceeds from the sale of the new building. The reconstruction will be developed under the name Of St. Martin.
In order to ensure that it continues to undertake the reconstruction, Huasuan will pay a cooperation fund of RMB60 million to the Group as a security deposit. As a guarantee for the partnership, the Group will mortgage (i) 100% of the equity of Zhongshan St. Martin (where the land is held) and (ii) one of the three plots of land in the land.
The company said that since 2018, the group has gradually outsourced its production to suppliers in Vietnam. The Group has been seeking opportunities to increase the return on investment of the production facility located on this land, including but not limited to identifying potential buyers for the production plant and optimizing the production plant. As at 31 December 2020, the Group classified approximately 78% of the factories and dormitories built on the site as investment properties and leased them to independent third parties. For the year ended 31 December 2020, the rental income attributable to the land was approximately RMB13.8 million. The cooperation agreement will provide the Group with the opportunity to increase the return on investment of the land through redevelopment. The Directors consider that the Cooperation Agreement is in the interests of the Company and its shareholders.
This article originated from Grand Gateway
![Saint-Martin and Bolívar took the initiative to withdraw after the talks, not because of the high wind and bright festival, but because of other grievances[fig]](data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=)