[30 Aug 2011 – Hong Kong] China ZhengTong Auto Services Holdings Limited (“ZhengTong Auto” or the “Company”, together with its subsidiaries, the “Group” Stock code: 1728), a major 4S dealership group in China, is pleased to announce that on 23 August 2011, the Company, Exactwin Limited (“Vendor”) and the Guarantor entered into the SP Agreement under which the Company has conditionally agreed to purchase (by itself or through one of its wholly-owned subsidiaries) from the Vendor the Sale Shares, being the entire issued share capital in the Target.

 

The Consideration payable by the Company to the Vendor for the Sale Shares is RMB5.5 billion (equivalent to approximately HK$6.548 billion). The Target Group is a major 4S dealership group in the PRC whose principal business is the retail sale of premium branded automobiles, and the structure of premium brand mainly focuses on Jaguar, Land Rover and Volvo. The Target Group has automobile dealership outlets spread over Beijing, Tianjin, Fujian, Hunan, Guangdong and Hainan. There is a total of 31 automobile operation points authorized by manufacturers, of which, 3 are under construction. The length of the dealership agreements obtained by the Target Group ranges from 1 to 3 years.

 

Executive Director and Chief Executive Officer of ZhengTong Auto, Mr. WANG Kunpeng said, “The Group is always committed to enhancing the sales of premium vehicle brands, and the Acquisition constitutes part of strategic investments of the Group as proposed during its listing exercise. Completion of the Acquisition will significantly expand the Group’s network for dealing in premium vehicle brands, contribute to the Group’s effort to become a core dealer in premium branded vehicles in China, and consolidate the Group’s leadership in the premium vehicle dealership sector in the PRC. The dealership network of the Target Group will also compliment the Group’s existing network and give rise to synergy effects. The revenue generating capacity and growth potential of the Target Group will contribute to the Group’s growth. In the future, the Group will continue to strengthen the vehicle dealership business and also better utilize its after-sales service channels and its good relationship with automobile manufacturers to accelerate the development of logistics and lubricant oil business, hence achieving excellent results. We’ll spare no effort to maintain our rapid growth as well as our leading position in China’s automobile market, trying our best to maximize return for the shareholders.