Shenzhen Chiwan Wharf Holdings Limited, whose shares are suspended due to a M&A process, announced today that the company will sign a contract of equity transfer with Qingdao Coast Real Estate Development Co., Ltd on August 30, buying its 75% equity capital with 532.5Mln RMB. The announcement states that Qingdao Coast Real Estate Development Co., Ltd owns 1,774,511.2 square meters land in the north area of Sifang harbor in Qingdao City. The land, 700 meters inland (corresponding coastline 2190 meters), may be used for 6 berths for ships of the hundred-thousand ton catagory.

Its shareholders are Qingdao Shengxin Investment Co., Ltd, holding 40% of capital shares; Shandong Shengli Co., Ltd, holding 35% of capital shares; and Qingdao Sifang City Development Co., Ltd, holding 25% of capital shares. The contract stipulates that the company transfers 75% equity of Qingdao Coast Real Estate Development Co., Ltd held by the three companies listed above. Qingdao Coast Real Estate Development Co., Ltd, shall give up its pre-emptive rights. The cost of this equity transfer fixed by the parties by negotiation comes to 710Mln RMB, the transfer fund of 75% equity mentioned above comes to 532.5Mln RMB.

Shenzhen Chiwan Wharf Holdings Limited pays the initial payment, to Shandong Shengli Co. Ltd and the other companies, approximately 286.9Mln RMB and handles the 65% equity transfer. It pays to Shandong Shengli Co., Ltd the remaining funds of 245.6Mln RMB before 25 Dec 2007 and handles the remaining 10% equity transfer. The announcement purported that the People’s Government of Sifang District of Qingdao City is willing to arrange an extension of 150 to 200 meters of the above-mentioned north area of Sifang District into the sea for Qingdao Coast Real Estate Development Co., Ltd to enable the developer to landfill some of the sea area and construct wharfs. The announcement also disclosed that aside from the above-mentioned 1,774,511.2 square meters of land, Qingdao Coast Real Estate Development Co., Ltd will fill about 50 meters of sea area, shaping a land area of about 176,511.6 square meters.

The license for the use of this land is still to be finalised. Both parties expressed in the contract that if Qingdao Coast Real Estate Development Co., Ltd acquires a license for the use of land, the 176,511.6 square meters area, before 20 Dec 2008, the fixed assets on the contract will be adjusted to about 840Mln RMB. If Qingdao Coast Real Estate Development Co., Ltd cannot obtain a license for the use of land, the shareholders of Qingdao Coast Real Estate Development Co., Ltd and Shenzhen Chiwan Wharf Holdings Limited agree to pay a total amount of 90Mln RMB (which comprises initial investment, project capital and interests and reasonable profit) and the fund will be paid out by 25 Dec 2008.