SouFun Holdings Limited (also known as Fang), has announced that it has had made significant progress on its acquisition of a controlling stake in Chongqing Wanli New Energy Co., Ltd. ("Wanli"), a company listed on the Shanghai Stock Exchange, and has also entered into agreements to restructure Wanli's assets.
Under the agreement, the Fang has agreed to subscribe through each of the Fang Subsidiaries for new shares of Wanli at a price of RMB23.87 per share. In exchange for the shares, Fang has agreed to transfer, through the its Subsidiaries, to Wanli the entire equity interests in five wholly-owned subsidiaries that operate as the Company's service platforms for online media business, Internet financial services, and big data business. The current preliminary valuation of the assets being transferred to Wanli is RMB16.18 billion (USD 2.5 billion).
Wanli has also entered into an asset sale agreement with Shenzhen Nan Fang Tong Zheng Investment Co., Ltd., the controlling shareholder of Wanli, and Mr. Xicheng Liu, pursuant to which Wanli has agreed to sell all of its current non-cash assets and liabilities and maintain at least RMB0.7 billion cash in Wanli.
Following these transactions, the Fang Subsidiaries will collectively hold approximately 70.01% of the share capital of Wanli. The Company will consolidate Wanli's operating results as Wanli will become a majority-owned indirect subsidiary of the Company.
To support the future business growth following the Restructuring, Wanli has concurrently entered into share subscription agreements with certain investors to issue new shares of Wanli at a price of RMB23.87 per share for a total consideration of up to RMB3.16 billion.
Mr. Vincent Mo, the Company's Chairman and CEO, comments: "We are thrilled to achieve this solid progress by entering into the definitive agreement with Wanli. The access to the China domestic capital market will not only facilitate our operations in China but also bring in the real value to our shareholders. We are expecting this restructuring to be closed in the near future and provide strong support to our fast growing e-commerce, financial services and online media business. Fang is aggressively transforming from the leading real estate media platform into a transaction oriented platform. The Wanli deal is definitely a very key step for us at this pivotal point".