Good news for UVEL25 Jun 2012 08:07
25 June 2012
UniVision Engineering Limited
("UniVision" or the "Group")
Agreement for sale of the Group's interest in Zhongshan shopping mall project
and
Repayment of loan with Mayne Management Limited
Introduction
UniVision, the AIM listed Hong Kong based designer and installer of digital surveillance and integrated security systems, is pleased to announce that, on 22 June 2012, the Group, Guangzhou Hua Xin Trading Company Limited ("Hua Xin") and Guangzhou Jun Heng Mechanical and Electrical Equipment Company Limited (the "Investor") entered into an agreement (the "Agreement") for the sale of the Group's entitlement to a 51% interest in the Group's shopping mall project in Zhongshan, China (the "Zhongshan Project") for a consideration of RMB110 million (equivalent to c. £11.1 million and HK$134.1 million*) (the "Sale"). The key terms of the Sale are detailed below.
Background to the Zhongshan Project
The Group's wholly owned subsidiary, Leader Smart Engineering (Shanghai) Limited ("Leader Smart"), has been the main contractor responsible for interior design and installation for the Zhongshan Project which included the design, supply and commissioning of digital solutions, CCTV systems and electrical & mechanical works. As at the date of the Agreement, Leader Smart has fulfilled its contractual duties on the shopping mall. However delays to the completion of the Zhongshan Project have been encountered due to the developer of the shopping mall having applied to the local authorities for permission to add a further two storeys onto the shopping mall. Construction on the Zhongshan Project has, as a consequence, been on hold. Over the past 18 months the Group has been exploring ways of generating value from the Zhongshan Project including the possible sale of the Group's entitlement to their 51% interest in the Zhongshan Project against which Leader Smart's work on the Zhongshan Project had been secured.
The Group has an outstanding loan of US$3.97 million (equivalent to HK$31 million**) from its former major shareholder, Mayne Management Limited ("Mayne"). The loan from Mayne was made exclusively to finance the Zhongshan Project.
On 23 December 2011 the Group announced that they had received HK$6.17 million in cash (equivalent to c. RMB5 million at that time) from the Investor (the "Deposit") and that the terms of the Deposit were to be finalised between the Group and the Investor. In September 2011 UniVision and Hua Xin, an affiliate of the Investor, had entered into a memorandum of understanding in respect of the possible sale of UniVision's interest in the Zhongshan Project and, as announced, it was anticipated by the Board of UniVision that should discussions progress on the sale of the Group's interest in the Zhongshan Project then the Deposit would be deduc
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