EC World REIT extends long stop date for divestment of 2 assets in China

As of date, only RMB333m out of RMB1.4b equity consideration has been prepaid to EC World REIT.

EC World REIT has entered into a supplementary agreement with Hangzhou Futou Beigang Enterprise Management,  Forchn International (FIPL), and Forchn Holdings Group (FGPL) to amend the terms of the divestment of its two logistics assets in China: Beigang Logistics  Stage 1 and Chongxian Port Logistics.

Hangzhou Beigang is the purchaser of EC World REIT’s properties, whilst FIPL and FGPL are sponsors of the deal.

The supplementary agreement provides for a long stop date extension, the flexibility of a two-stage completion process, and the revision of the property values of the divestment properties agreed upon by all parties.

According to EC World REIT’s manager, the sponsors and purchasers need a long-stop date extension due to four reasons.

One of these reasons is that EC World REIT has only received RMB333.0m of the RMB1.37b equity consideration for the divestment properties.

“To proceed with the completion of the divestment, the Purchasers will need to obtain sufficient financing to be able to pay the outstanding balance of RMB1.0b to the vendor for completion,” the manager stated.

Meanwhile, the revised agreed property value of Chongxian Port Logistics is now RMB824.4m, up from RMB820.1m. Beigang Logistics Stage 1’s agreed property value rose to RMB1.22b from RMB1.21b.