According to China Xiniya Fashion Ltd. (ADR) (NYSE:XNY), its controlling shareholder Qiming Investment Ltd., which is headed by China Xiniya Fashion CEO and Chairman Qiming Xu, has agreed to sell the controlling interest to British-Virgin-Islands-based companies Honest Plus Investments Ltd. and Perfect Lead International Ltd.
As of Sunday, Qiming Investment owns nearly 60% of the company, which is equivalent to 134.36 million ordinary China Xiniya Fashion shares.
As per the agreement, Qiming Investment is unloading 50.50% of its shares, which is roughly equivalent to 115 million ordinary shares, to Honest Plus Investments and Perfect Lead International. This brings the deal to $1.80 per ordinary share or a total of $12.94 million.
To fulfill the agreement, China Xiniya Fashion’s board of directors and investors need to approve the Xiniya Holdings Ltd. sale to Xu. The value of the transaction will be determined by a third party. Also, the True Silver Ltd. acquisition needs to be completed before the agreement can push through. True Silver, a wholly-owned subsidiary of Honest Plus Investments and indirectly controlled by Wei Qizhi, will employ a variable interest entity (VIE) structure as it consolidates 70% of Hubei Chutian Lending Co. Ltd.’s financial results. Qizhi is the controlling shareholder of both Honest Plus Investments and Perfect Lead International, and the founder of Hubei Chutian Lending.
These transactions, which are respectively known as the Xiniya transaction and Chutian transaction, need to be fulfilled along with other regulatory requirements.
The fulfillment of the agreement will immediately transpire in a maximum of 10 business days after all the requirements and conditions have been met.
Once the sale has been completed, the designees of Honest Plus Investments and Perfect Lead International as controlling shareholders will immediately be appointed as the CEO, Chairman, and directors of the board. Moreover, China Xiniya Fashion will be transformed to a lending firm from a men’s fashion company. The purchasers are looking forward to widening the company’s financial offerings once acquired.