On July 10th, the Hong Kong Stock Exchange-listed company China Barton issued a public announcement entitled "Disclosure and Related Party Transactions - Sale of Subsidiary," revealing information regarding the sale of equity in its subsidiary.
According to the announcement, the company has signed a sale agreement with the target company, the Burton party, the Han party, and the buyer. After the completion of the transaction, the buyer and Han Holding SPV will hold 81% and 19% equity stakes in the target company, respectively.
According to the sales agreement:
(a) Boton Holding SPV has agreed to sell, while the buyer has agreed to purchase 5,100 shares of the target company's stock, representing 51% of the target company's equity, at a price of RMB 100,000,000. (b) Han Holding SPV has agreed to sell, while the buyer has agreed to purchase 3,000 shares of the target company's stock, representing 30% of the target company's equity, at a price of RMB 58,823,529. On the date of the sale agreement, the target company is a wholly-owned investment holding company of Han Holding SPV. The target group will undergo a restructuring of its Korean companies prior to the completion of the sale.
The restructuring of the South Korean company will be carried out by Boton Holding SPV, Hanfang, and Target Group. Following the restructuring, Boton Holding SPV and Han Holding SPV will respectively hold 51% and 49% of the shares of the target company, effectively making the South Korean target company a wholly-owned subsidiary of the target company. The announcement includes key figures such as the representatives of Boton Holding SPV and Han Holding SPV, as well as relevant shareholders.
Introduction of Backgrounds of all parties involved.
According to the announcement, China Bodon is an investment holding company registered in the Cayman Islands. Its main business involves research, production, trade, and sales of extracts, flavors, and fragrances. Additionally, the company is also involved in the design and manufacturing of high-quality e-cigarettes and related products.
The company that is being sold is named Mons, and it is a company registered and established in South Korea. Its main business is trading e-cigarette products.
According to the annual financial data as of December 31, 2021 and December 31, 2022, Mons recorded pre-tax net earnings of RMB 32,000,000 and RMB 22,700,000, and post-tax net earnings of RMB 30,200,000 and RMB 19,100,000, respectively. The audited net asset values were approximately RMB 45,500,000 and RMB 67,000,000.
The buyer in this transaction is an investment holding company registered under the laws of the British Virgin Islands, along with its wholly owned subsidiary, Sunnyheart Inc. Sunnyheart Inc. is a limited liability company registered under the laws of the Cayman Islands, primarily engaged in the sale of e-cigarettes. According to the director based on information provided by Sunnyheart Inc., the ultimate beneficial owner of Sunnyheart Inc. is Ms. Wang Ying, who holds 50% of the voting rights in Sunnyheart Inc. and is the sole director of the company.
According to reports, Bubblemon (Huizhou Babo Technology Co., Ltd.) is a wholly-owned subsidiary of China's Botton Group, established in May 2021 in Huicheng District, Huizhou City's high-tech industrial park. The company specializes in the production of disposable e-cigarettes under the BUBBLEMON and MONS brands.
RELX and Bubblemon have previously joined forces to launch a disposable e-cigarette in the UK market.
References:
China's Pontoon Declaration 【1】
Spice giant sells subsidiary: Annual net income stands at $32 million.
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