Footwear Giant Yuyuan 1 Billion 600 Million Sells Subsidiaries To Continue To Focus On Core Business Development

In May 8th, Yuyuan group, the world's largest shoe-making enterprise, announced:

The Grand Wealth Group Limited, an indirect wholly owned subsidiary of Yuyuan group, sold the issued share capital of TCHC in the form of merger in May 7th as a seller. The combined price was composed of the purchase price and the royalty value of the purchase, of which the purchase price was $230 million (about 1 billion 600 million yuan).

The buyer's guarantor and TCHC have agreed to guarantee the buyer's proper, full and timely payment of the monetary liability of the merger agreement, and the company has agreed to guarantee the seller's proper, full and timely payment of the monetary liability of the merger agreement.

According to the merger agreement, the sale share must be converted to the right to charge the combined price.

After completion, TCHC group will no longer be Affiliated Companies of Yuyuan group, while TCHC group's financial performance will no longer be incorporated into the group's financial statements.

Before concluding the merger agreement, Yuyuan group holds TCHC99.99% issued share capital, and TCHC has redeemed some of the issued shares of TCHC to a minority shareholder.

Before the merger comes into effect, TCHC will attempt to redeem a share held by the remaining minority shareholders.

If TCHC fails to redeem the shares, TCHC may reverse share splitting in accordance with Delaware law, and the shares owned by minority shareholders will be written off in exchange for the fair value of the remaining shares.

Therefore, it is expected that Yuyuan group will hold all the issued share capital of TCHC on completion date.

It is reported that TCHC group mainly engaged in clothing design, import and sale in the United States.

In the year 2018 and 2017, net profit after tax was $17 million 80 thousand and $15 million respectively.

The company said that the group could cash in its investment in TCHC, and the sale was part of the company's continued focus on core business development.

In addition, based on the estimated financial information of the TCHC group on completion date, it is expected that the group will confirm about $3 million from the sale items (excluding paction expenses).

It is noteworthy that Yuyuan group's net profit has declined sharply in recent years.

Data show that in 2018, Yuyuan group's annual revenue reached 9 billion 695 million US dollars, up 6.29% over the same period last year, and the profit attributable to shareholders decreased by 40.85% to 307 million US dollars.

In 2017, Yuyuan group's shareholders' profits accounted for 2.87% to 519 million US dollars in the same period.

For this paction, Yuyuan group said that the group can cash in its investment in TCHC, and the sale is part of the company's continued focus on core business development.

In addition, based on the estimated financial information of the TCHC group on completion date, it is expected that the group will confirm about $3 million from the sale items (excluding paction expenses).