Bao Haiping entered into definitive agreement to acquire Hubei Mengke Paper Company Limited from Champion Alliance International Holdings Limited (SEHK:1629) for HKD 49 million on August 5, 2022. The consideration shall be settled by the Bao Haiping by entering into the deed of novation with Champion Alliance International Holdings and the lender upon Completion pursuant to which the Purchaser agrees to assume all liabilities and to satisfy all claims and demands whatever arising out of or in respect of the loan owing by Champion Alliance International Holdings. For the year ending, December 31, 2021, Hubei Mengke Paper Company Limited reported revenue of HKD 165.15 million and net loss of HKD 16.01 million.

As at June 30, 2022, the unaudited consolidated net asset value of Hubei Mengke Paper Company was approximately CNY 44.9 million (HKD 52.6 million). The transaction is subject to the approval by the shareholders of Champion Alliance International Holdings Limited and legal and financial due diligence review on Hubei Mengke Paper Company. As of August 5, 2022, Champion Alliance International Holdings has received a written approval of the disposal by shareholder holding approximately 64.09% stake in Champion Alliance International Holdings.

If the conditions set out in the agreement have not been satisfied or waived on or before on November 30, 2022, the agreement shall cease. The transaction is expected to complete within 3 business days after fulfilment of all the conditions precedent under the agreement. Lego Corporate Finance Limited acted as financial advisor for Champion Alliance International Holdings Limited.