Home Facts company

Major Reorganisation Initiative: Separation of Non-property Related Business to Focus on Property Business

Major Reorganisation Initiative: Separation of Non-property Related Business to Focus on Property Business

Write: Ava [2011-05-20]

Not for release, publication or distribution, in whole or in part, in or into US, Canada, Australia, or Japan or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction.


Guangzhou Investment Announces Major Reorganisation Initiative

Separation of Non-property Related Business to Focus on Property Business

Major Reorganisation Initiative: Separation of Non-property Related Business to Focus on Property Business

Hong Kong, 20 October 2009 Guangzhou Investment Company Limited ( GZI or the Company ) is pleased to announce a major reorganization initiative to separate its toll road business and to focus singly on the property business. The Company also proposes to change its name to Yuexiu Property Company Limited ( ). The Company currently holds its toll road business through its equity interest in GZI Transport Limited ( GZT )

The proposed reorganization is a significant milestone in the Company s efforts to streamline its businesses and to commit more financial and management resources to the property sector. The Company believes that it offers the following benefits:

1. Transform the Company into a pure property company to capitalize on the market uptrends in the sector
2. Monetize the toll road business and raise approximately HK$1.6 billion for the property business without diluting its shareholders interest in the Company
3. Enhance corporate governance standards and improve transparency by facilitating benchmarking its property business against competition
4. Streamline corporate structure and improve management efficiency
5. Allow the Company and GZT to independently access capital for better financial management and funding allocation

The proposed reorganization principally entails the following components:

1. Declaration by the Company of a special dividend in the shares of GZT held by it with a cash alternative to its shareholders
2. Offer of all of its remaining GZT shares to its shareholders

The number of GZT shares distributable pursuant to the special dividend will be approximately 214 million shares, representing approximately 12.78% of GZT s issued share capital. Each board lot of 2,000 GZI shares is to receive 60 GZT shares or HK$180 if the shareholder elects the cash alternative. Under the share offer, no less than approximately 544 million GZT shares, representing approximately 32.50% of GZT s issued share capital, will be offered to the Company s shareholders on the basis of not less than 152 GZT shares for every 2,000 GZI shares at HK3.00 each GZT share.

Yue Xiu Enterprises has irrevocably undertaken to take up the special dividend in GZT shares in lieu of the cash alternative. It is also underwriting the share offer to signify its support for the reorganization and to minimize any potential share price volatility. Upon the completion of the reorganization, the Company will cease to hold any share in GZT and Yue Xiu will remain as the controlling shareholder of GZT.


Mr. Lu Zifeng, Chairman of the Company commented, The proposed reorganization offer tremendous value to the Company and its shareholders. It is a significant opportunity for the Company to fully utilize its core competency in the property sector and to capitalize on the market potential the property sector offers. I am confident that our shareholders will support this transaction.

Standard Chartered Bank (Hong Kong) is the financial advisor to the Company for this reorganization.

This release should be read in conjunction with the full text of the official Announcement published on October 20, 2009.

Description of the Company

The Company was listed in Hong Kong in 1992 and is one of the top 10 integrated property developers in Guangzhou. The Company s current businesses include property development and the investment in and operation of toll roads, with its businesses mainly concentrated in the Guangzhou area.

~End~

For enquiries, please contact:

Guangzhou Investment Company Limited
Mr. Alan Ha / Mr. Tim Feng
Tel: (852) 2511 6671 / (852) 2593 2396
Email: contact@gzinvestment.com.hk

Rikes Hill & Knowlton Limited
Mr. Karl Cheung / Ms. Christy Lai
Tel: (852) 2520 2201
Email: karl.cheung@rikes.hillandknowlton.com /
christy.lai@rikes.hillandknowlton.com