GP Batteries International : Proposed Disposal of an Industrial Complex Located in Dongguan, PRC (in PDF)

Asset Acquisitions and Disposals::PROPOSED DISPOSAL OF AN INDUSTRIAL COMPLEX LOCATED IN DONGGUAN, PRC Issuer & Securities

Issuer/ Manager	GP BATTERIES INTERNATIONAL LIMITED
Securities	GP BATTERIES INT LTD - SG0964000491 - G08
Stapled Security	No

Announcement Details

Announcement Title	Asset Acquisitions and Disposals
Date & Time of Broadcast	28-Dec-2016 17:39:30
Status	New
Announcement Sub Title	PROPOSED DISPOSAL OF AN INDUSTRIAL COMPLEX LOCATED IN DONGGUAN, PRC
Announcement Reference	SG161228OTHR5Y6I
Submitted By (Co./ Ind. Name)	Kelly Kiar Lee Noi
Designation	Company Secretary
Description (Please provide a detailed description of the event in the box below)	Please refer to the attachment.

GP Batteries International Limited

(Incorporated in the Republic of Singapore) Company Registration No. 199002111N

东省东莞机械进出口有限公司

ANNOUNCEMENT

东莞市中顿实业有

东莞超霸电池有限公司 广

PROPOSED DISPOSAL OF AN INDUSTRIAL COMPLEX LOCATED IN DONGGUAN, PRC

1. I限NT公R司ODUCTION
2. Proposed Disposal. The Board of Directors (the "Board") of GP Batteries International

   Limited (the "Company") wishes to announce that the Company's wholly-owned subsidiary,

   Dongguan Chao Ba Batteries Co Ltd (

   ) ("Dongguan Chao Ba"), has

   today entered into a sale and purchase agreement (the "Agreement") with

   (the "

   Purchaser") and Guangdong Dongguan Machinery Import & Export Co., Ltd. (

   东莞市塘厦镇宏业工业区

   东府国

   号

   用（ ）字第特

   ) (the "Guarantor", and together with Dongguan Chao Ba and

   the Purchaser, the "Parties" and each, a "Party"), pursuant to which Dongguan Chao Ba has

   agreed to sell, and the Purchaser has agreed to purchase, the following (collectively, the "Property"):

3. the right to use a 30,821 square metre plot of land located at No. 3 Hong Ye North No.

   粤房地证字第 号

   11 Road, Hong Ye Industrial Zone, Tangxia Town, Dongguan City, Guangdong

   Province, the People's Republic of China ("PRC") ( ) (

   1997

   粤房地证字第

   号

   162

   ) (the "Land"); and

   粤房地证字第

4. the buildings and ancillary facilities located on the Land with a total built-up area of 29,878.10 square metres, comprising the following (collectively, the "Buildings"):

5. a factory building ( 9,992.82 square metres;

   1677379号

   ) with a total built-up area of

6. a factory building (

   4,960 square metres;

7. staff quarters (

   12,825.28 square metres; and

   C4282529

   1677380

   ) with a total built-up area of

   ) with a total built-up area of

8. a simple factory building which does not have a building ownership certificate, with a total built-up area of approximately 2,100 square metres,

   (such disposal, the "Proposed Disposal"),

   and the Guarantor has agreed to provide the Guarantee (as defined in paragraph 3.8 below) to Dongguan Chao Ba.

9. Information on the Purchaser. The Purchaser is a property development company incorporated in the PRC. The Purchaser is not related to the Company, its subsidiaries or its controlling shareholder.
10. Completion. Completion of the Proposed Disposal is subject to and conditional upon the satisfaction of various conditions precedent ("Conditions"), as set out in paragraph 3.3 below.
11. INFORMATION ON THE PROPERTY
12. The Property. The Property is an industrial complex located in Hong Ye Industrial Zone. Dongguan Chao Ba has been granted the right to use the Land for a period of 50 years, commencing from 20 November 1995 to 19 November 2045, for industrial use. The Property is currently used by the Group as a factory for the manufacturing of batteries.

13. Net Asset Value. Based on the unaudited consolidated financial statements of the Company and its subsidiaries (collectively, the "Group") for the second quarter ended 30 September 2016 (the "2Q2016 Results"), the net asset value ("NAV") of the Property was approximately RMB5.7 million (approximately S$1.2 million1).

    Based on the Consideration (as defined in paragraph 3.2 below), the excess of the proceeds from the Proposed Disposal over the NAV of the Property as at 30 September 2016 is approximately RMB99.3 million (approximately S$20.7 million).

14. Market Value. The Company has appointed RHL Appraisal Limited to conduct a valuation on the Property and to prepare the results of the study on the Property (the "Valuation Report"). Based on the Valuation Report, the market value of the Property was approximately RMB51.3 million (approximately S$10.7 million) as at 30 June 2016.
15. Net Profits and Gain on Disposal. There are no net profits attributable to the Property as the Buildings are mainly used as factories for the Group's manufacturing purposes. The estimated gain on disposal of the Property is approximately S$20.7 million before tax and approximately S$15.5 million after tax.
16. PRINCIPAL TERMS OF THE PROPOSED DISPOSAL
17. Proposed Disposal. Pursuant to the terms of the Agreement, Dongguan Chao Ba shall sell, and the Purchaser shall purchase, the Property, free from any encumbrances.
18. Consideration. The consideration to be paid by the Purchaser to Dongguan Chao Ba for the Proposed Disposal (the "Consideration") is RMB105 million (approximately S$21.9 million).

    1 Unless otherwise stated, the approximate S$ equivalent of RMB amounts in this Announcement are based on an exchange rate of S$1: RMB4.80.

    The Consideration shall be paid by the Purchaser to the designated bank account of Dongguan Chao Ba in two tranches, as follows:

19. RMB31.5 million shall be paid as a deposit (the "Deposit") within 6 business days (excluding public holidays and force majeure events) from the date of signing of the Agreement; and

20. within 10 business days from the date of signing of the Agreement, Dongguan Chao Ba and the Purchaser shall make an application to Dongguan Tangxing Subbranch of Industrial and Commercial Bank of China (the "Bank") as designated by Dongguan Chao Ba for the remaining RMB73.5 million to be held in escrow by the Bank. The Purchaser shall, within 5 days after the date of registration of the transfer of the Property, inform the Bank in writing to pay Dongguan Chao Ba the full amount of the remaining RMB73.5 million. Dongguan Chao Ba is also entitled to request the Bank's full payment of the remaining RMB73.5 million by providing notice of the registration of the transfer of the Property issued by the relevant real estate regulatory authority or the relevant query result reflecting the registration of the transfer of the Property.

    Any associated taxes and transaction costs shall be borne solely by the Purchaser, save for enterprise income tax payable which shall be borne by Dongguan Chao Ba. The Purchaser shall pay the taxes payable (according to the tax review results issued by the relevant governmental department) to the designated bank account of Dongguan Chao Ba.

    The Consideration was arrived at on a willing buyer willing seller basis after taking into account, inter alia, the rationale for the Proposed Disposal, the Valuation Report, recently transacted prices of the properties around the vicinity of the Property and offers received by Dongguan Chao Ba for the Property.

21. Conditions. Completion of the Proposed Disposal is subject to and conditional upon the satisfaction of the following Conditions:

22. the approval of the shareholders or the board of directors of the Purchaser for the

    金山工业集团有限公司

    Proposed Disposal;

23. the approval of the shareholders or the board of directors of the Guarantor for the provision of the Guarantee (as defined in paragraph 3.8 below); and

24. the approval of the shareholders (if such shareholders' approval is required by applicable listing regulations) and/or the board of directors of each of (a) the Company, (b) GP Industries Limited (being the Company's immediate holding

company) and (c) Gold Peak Industries (Holdings) Limited (

)

(being the Company's ultimate holding Company) for the Proposed Disposal.

Dongguan Chao Ba and the Purchaser undertake to immediately take all reasonable efforts to ensure the passing of the resolutions for the abovementioned approvals. Within 5 business days after the satisfaction of a Condition, the responsible Party (being the Purchaser in respect of the Condition set out in sub-paragraph (i), the Guarantor in respect of the Condition set out in sub-paragraph (ii) and Dongguan Chao Ba in respect of the Condition set out in sub-paragraph (iii)) shall provide written notice to the other Parties of the satisfaction of the relevant Condition.