Jiangxi Hongcheng Environment Co.,Ltd. (SHSE:600461) signed an an agreement to acquire Anyi County Water Supply Co., Ltd. and Jiangxi Dingyuan Ecological Environmental Protection Co., Ltd. and Jiangxi Lantian Blue Water Environmental Protection Engineering Co., Ltd. from Nanchang Water Industry Group Co., Ltd. for approximately CNY 930 million on January 29, 2021. As of April 6, 2022, The acquisition of Jiangxi Dingyuan Ecological has been completed. Jiangxi Hongcheng Environment Co.,Ltd. will issue 86,471,621 shares at a price of CNY 6.66 per share and will pay CNY 368.199 million in cash. Post completion, Jiangxi Dingyuan Ecological and Jiangxi Lantian Blue Water and Anyi County Water Supply will operate as wholly owned subsidiaries. Jiangxi Hongcheng Waterworks intends to raise supporting funds through non-public issuance of shares to no more than 35 eligible specific objects including Nanchang Water Industry Group Co., Ltd. or its related parties. The total amount of supporting funds raised shall not exceed CNY 368.199 million, which shall not exceed 100% of the transaction price of the assets to be purchased. For the period ended October 31, 2020, Jiangxi Dingyuan reported Total assets of CNY 3.17484 billion, Net assets of CNY 955.43 million, revenue of CNY 449.66 million and Net profit of CNY 75.23 million. For the period ended October 31, 2020, Jiangxi Lantian reported Total assets of CNY 499.24 million, Net assets of CNY 253.26 million, revenue of CNY 61.17 million and Net profit of CNY 13.14 million. For the period ended October 31, 2020, Anyi County reported Total assets of CNY 146.89 million, Net assets of CNY 62.68 million, revenue of CNY 27.54 million and Net profit of CNY 9.02 million. For the year ended December 31, 2019, Jiangxi Dingyuan reported Total assets of CNY 2.67561 billion, Net assets of CNY 680.15 million, revenue of CNY 365.42 million and Net profit of CNY 46.71 million. For the year ended December 31, 2019, Jiangxi Lantian reported Total assets of CNY 469.34 million, Net assets of CNY 40.13 million, revenue of CNY 62.82 million and Net profit of CNY 5.05 million. For the year ended December 31, 2019, Anyi County reported Total assets of CNY 137.48 million, Net assets of CNY 53.60 million, revenue of CNY 29.91 million and Net profit of CNY 7.90 million. On January 29, 2021, eighteenth extraordinary meeting of the seventh directorate of Jiangxi Hongcheng reviewed and approved the proposals related to the transaction plan. Board of Directors of Jiangxi Hongcheng still needs to review and approve the specific plan for this reorganization. Transaction is subject to Municipal holdings, Nanchang SASAC, the actual controller and shareholders of Jiangxi Hongcheng. Transaction is also subject to approval from China Securities Regulatory Commission. As of November 1, 2021 Jiangxi Hongcheng Environment Co.,Ltd. shareholders approved the deal. As of March 9, 2022, the transaction received China Securities Regulatory Commission's conditional approval. On April 6, 2022, the company received the Approval for the Jiangxi Hongcheng Environment to Issue Shares to Nanchang Water Industry Group Co., Ltd. from China Securities Regulatory Commission. On March 18, 2022, equity transfer and industrial and commercial change registration of Jiangxi Dingyuan Ecological Environmental Protection Co., Ltd. was completed.


Zhang Jian of Shenwan Hongyuan Securities Underwriting Sponsor Co., Ltd. acted as financial advisor and Yang Ailin of Jiangxi Huabang Law Firm acted as legal advisor to Jiangxi Hongcheng Waterworks. Li Guoping, Liang Hua, Wan Qiang and Tan Liuting of Wuyige Certified Public Accountants LLP acted as accountants to Jiangxi Hongcheng Environment Co.,Ltd.