Enhances Capital Base and Liquidity to Facilitate Future Development
HONG KONG, June 13, 2013 /PRNewswire/ -- Zall Development Group Ltd ("Zall Development", or the "Group", Stock Code: 2098), the leading developer and operator of large-scale, consumer product-focused wholesale shopping malls and commercial properties in China, announced today that it has entered into an agreement with PAG, one of the leading alternative investment fund management groups in Asia. PAG will make a strategic investment in Zall Development which will enhance the capital base and liquidity of the Group and facilitate its future development.
The investment will be in the form of convertible bonds. Pursuant to the agreement, PAG agreed to subscribe approximately USD100 million of firm bonds and may subscribe up to USD50 million of option bonds via its Pacific Alliance Asia Opportunity Fund L.P with the interest rate of 5.5% per annum and the maturity date in June 2018. Based on the initial conversion price of HK$3.0799 and assuming full conversion of 378,109,678 new shares of the firm bonds and the option bonds, the bonds represent approximately 10.80% of the existing issued capital and 9.75% of the enlarged capital of the Group. The net proceeds from the issue of the firm bonds and the option bonds will amount to approximately USD146.0 million.
Mr. Yan Zhi, Chairman and CEO of Zall Development said, "We are excited to have PAG as a strategic investor of Zall Development. This transaction significantly enhances our financial position and enables us to take full advantage of future business opportunities. The investment will further boost our strength in expanding and replicating our successful business model nationwide."
In 2012, the Group achieved net profit of RMB1,169 million with gross profit margin at 72.7%, benefitting from the increase in the average selling price of the wholesale shopping mall units in the North Hankou International Trade Center, the Group's flagship development in Wuhan.
About Zall Development
Zall Development is a leading developer and operator of large-scale, consumer product-focused wholesale shopping malls, as well as commercial space provider, in China. Headquartered in Wuhan, Hubei province, Zall Development primarily engages in selling and leasing consumer product-focused wholesale market properties and other commercial spaces. The Company's major clients include suppliers, manufacturers, dealers and other small to medium sized local wholesale enterprises. Besides developing and operating wholesale market properties, Zall Development offers a comprehensive range of integrated logistics and trading facilities and services.
Zall Development's major projects and land bank are mainly located in Wuhan, Shenyang, and Changsha. Its property portfolio comprises wholesale market properties and commercial properties. The Company's flagship project, the North Hankou International Trade Center ("North Hankou"), is the largest consumer products interstate-trading platform in China. According to Savills, North Hankou is the largest consumer product focused wholesale market in terms of planned GFA with land use rights obtained in Central China, comprising more than twenty wholesale shopping malls that respectively focus on leather footwear, small household items, hotel products and supplies, cotton knitwear, apparel, home textiles and home appliances, international brands, general products, gift and accessories, and automobiles, just to name a few.
