BEIJING and URUMQI, China, Feb. 4, 2019 /PRNewswire/ -- China Lending Corporation ("China Lending" or the "Company") (Nasdaq: CLDC), a non-bank direct lending corporation servicing micro, small and medium sized enterprises (MSME), currently underserved by commercial banks in China, today announced that it has signed a framework agreement (the "Agreement") to acquire up to 80.4592% of equity interest in Zhejiang Lixin Enterprise Management Holding Co., Ltd. ("Lixin"), a diversified financial services company which China Lending currently holds a 1% equity interest following a transaction completed in January.
Pursuant to the Agreement entered into by and between China Lending and certain shareholders of Lixin in January 2019, China Lending will acquire up to 80.4592% of equity interest in Lixin from six selling Lixin shareholders by issuing new shares and/or using cash on hand. These selling shareholders consist of Shaoxing Gedun Furniture Co., Ltd., Hangzhou Yinxiang Assets Management Co., Ltd., Shaoxing Aoyuan Intellectual Technology Co., Ltd., Dayu Yangguang (Beijing) Assets Management Co., Ltd., Mr. Zhu Jialin, and Zhejiang Hengmao Construction Co., Ltd. (collectively, the "Selling Shareholders") who respectively hold 18.6456%, 16.4766%, 13.2932%, 13.1534%, 9.4452% and 9.4452% of equity interest in Lixin prior to the transaction. The proposed transaction has been approved by the Board of Directors of China Lending and majority of the shareholders of Lixin.
Although the exact terms and conditions of the proposed transaction are still being finalized, financial and legal due diligence has been launched by respective parties. The proposed transaction is expected to be consummated through multiple closings with the first closing by June 30, 2019, subject to further review and approval of China Lending's Board of Directors and/or shareholders, if needed, as well as other customary closing conditions.
As part of the closing conditions, Lixin has pledged to meet average annual net profit target of no less than RMB 20 million (approximately US$3.0 million) for the three years following the closing of the proposed transaction (the "Net Profit Target"). In the event Lixin fails to achieve the Net Profit Target, the Selling Shareholders agree to forfeit certain cash and/or shares it will receive from China Lending.
Ms. Jingping Li, Chairwoman and Chief Executive Officer of China Lending, commented, "After three months of growing collaboration and cooperation, we decide to take the Lixin partnership to the next level. We look forward to a smooth transaction in the next several months that could potentially lead to China Lending gain majority control in Lixin, further transforming the Company into a profitable and well diversified financial services company with geographical outreach well beyond the Xinjiang Uyghur Autonomous Region."
Zhejiang Lixin Enterprise Management Holding Co., Ltd. ("Lixin")
Headquartered in Hangzhou, Zhejiang province, Lixin is a financial service company focusing on providing a wide range of financing solutions and related peripheral services to individuals and MSMEs, including financial leasing, factoring, private funding, financing guarantee and supply chain management, in the Yangtze River Delta Region. Lixin and its subsidiaries are established in January 2013 with registered capital of RMB 101 million (approximately $14 million).
About China Lending Corporation
Founded in 2009, China Lending is a non-bank direct lending corporation and provides services to micro, small and medium sized enterprises, farmers, and individuals, who are currently underserved by commercial banks in China. Headquartered in Urumqi, the capital of Xinjiang Autonomous Region, with a registered capital of $94.7 million (RMB 600 million) as of June 30, 2018 China Lending is one of the largest direct lending companies in the region in terms of registered capital. For more information, please visit: www.chinalending.com.
This press release may include forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that China Lending expects or anticipates will or may occur in the future are forward-looking statements and are identified with, but not limited to, words such as "may," "believe" and "expect." These statements are based on certain assumptions and analyses made by China Lending in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances. Actual results may differ materially from those expressed herein due to many factors such as, but not limited to, (1) the ability to obtain or maintain the listing of the Company's securities on the NASDAQ Capital Market; (2) the ability to recognize the anticipated benefits of our business combination; (3) the outcome of any legal proceedings that may be instituted against the Company; (4) changes in applicable laws or regulations; (5) the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; and (6) other risks and uncertainties indicated from time to time in the proxy statement filed by the Company in connection with the business combination, including those under "Risk Factors" therein, and other factors identified in the Company's prior and future filings with the SEC, available at www.sec.gov.
These forward-looking statements are based on information available as of the date of this press release and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date and the Company undertakes no obligation to update any forward-looking statements contained herein to reflect events or circumstances which arise after the date of this press release, whether as a result of new information, future events or otherwise, except as may be required under applicable securities law.
For investors and media inquiries please contact:
At the Company:
Tony Tian, CFA
Weitian Group LLC
SOURCE China Lending Corporation