On 23 June 2008, Baoji Department Store (Group) Co., Ltd. announced that it plans to conduct an asset swap with HNA Commercial Holdings Co., Ltd., a subsidiary of the company, and the controlling shareholder of Baoji Department. Following the asset swap, a 100% stake in Baoji Commercial owned by Baoji Department will be exchanged with a 100% stake in HNA Foods Holding Co., Ltd. owned by HNA Commercial. Baoji Department will retain its core businesses which include catering services for airlines and railways, hotel management, the production and sale Chinese traditional medicines, toll collection for bridges and roads and real estate development.

HNA Foods, with a registered capital of RMB 200 mln, was jointly established in 2004 by HNA Group with a 90% stake and by Yangtze River Investment Co. Ltd with a 10% stake. The stakes have been transferred to HNA Commercial for the above-mentioned asset swap. As of 31 Dec 2007, HNA Foods operated seven subsidiaries. The net profit of HNA Foods in 2008 is estimated to be RMB 18.38 mln and RMB 21.66 mln in 2009.

Xian Minsheng Group Co., Ltd. announced on 23 June that it will conduct a private placement of 34 mln shares to HNA Commercial at RMB 5.74 per share, in order to acquire a 100% stake in Baoji Commercial, which will be acquired by HNA Commercial following the above-mentioned asset swap. Following the private placement, HNA Commercial will hold a 28.19% stake in Xian Mingsheng, up from 19.16%.

HNA Commercial also holds a 61% stake in Shaanxi Jingzhong Jiale Investment Co., Ltd., which is mainly engaged in the operation of chain supermarkets. In addition, HNA Commercial has pledged that it will inject its 61% stake in Shaaxi Jiangzhong Jiale into Xian Mingsheng.


Source: Shanghai Securities News

Date: 23 Jun 2008

CN01/MZ/BT/KM