Home » The third adjustment to the transaction plan is that HIC Group plans to acquire 100% equity of Hailv Duty Free for RMB 2.037 billion.

The third adjustment to the transaction plan is that HIC Group plans to acquire 100% equity of Hailv Duty Free for RMB 2.037 billion.

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HIC Group (603069) to Acquire Hailv Duty Free for 2.037 Billion Yuan

After nearly two years of negotiations, HIC Group has announced its plans to acquire Hainan Tourism Investment Duty Free Products Co., Ltd., a subsidiary of the indirect controlling shareholder Hainan Tourism Investment and Development Co., Ltd. The acquisition will involve purchasing 100% equity of Hailv Duty Free for 2.037 billion yuan.

The initial transaction price was around 5 billion yuan, which was later adjusted to 4.08 billion yuan in April last year. The latest adjustment comes after the performance of Hailv Duty Free in November and December 2023 fell below expectations due to the overall impact of the Hainan Islands Duty Free Market.

HIC Group plans to fund the acquisition by issuing shares and paying cash, with a total of 1.731 billion yuan to be paid in shares and approximately 306 million yuan in cash. The company also plans to raise 738 million yuan in supporting funds, with 306 million yuan to be used for the transaction and the rest for working capital and other expenses.

The acquisition is expected to help HIC Group transition from its traditional passenger transport business to a duty-free commercial comprehensive business, boosting the company’s net profit and enhancing shareholder interests. The company’s main business will transform to focus on duty-free commercial operations, aligning with the growth of the Hainan Islands Duty Free Market.

HIC Group’s revenue for the first three quarters of 2023 was 609 million yuan with a net loss of 42.19 million yuan. The company aims to capitalize on the growing duty-free market in Hainan and maximize profitability post-acquisition.

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The transaction plan is subject to approval from the Hainan Provincial State-owned Assets Supervision and Administration Commission and review by the shareholders’ meeting. Despite the adjustments in the transaction price, HIC Group remains optimistic about the long-term potential of the acquisition.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Readers are advised to conduct their research before making any investment decisions.

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