Stock Code: 000553 (200553) Stock Abbreviation: ADAMA A(B) Announcement No. 2020-60
ADAMA Ltd.
Announcement on the Signing of the Second
Supplemental Agreement to the Shanghai Dibai
Equity Purchase Agreement
The Company and all members of the Company’s Board of Directors confirm that all
information disclosed herein is true, accurate and complete, with no false or
misleading statement or material omission.
I. Overview of the Transaction
On November 5, 2019, the 18th Meeting of the 8th session of the Board of Directors of
the Company approved the Acquisition of a 50% Equity Stake in Shanghai Dibai
Plant Protection Co., Ltd. (“Dibai”), the domestic distribution arm of Jiangsu Huifeng
Agrochemical Co., Ltd. (“Huifeng”). On November 6, 2019, the Company executed
an Equity Purchase Agreement (“EPA”) with Huifeng to acquire the 50% equity stake
in Dibai held by Huifeng (“Transaction”). The estimated purchase price was RMB
370 million, with the final purchase price to be determined based on the net debt of
Dibai at closing date, in accordance with the EPA and subject to the Appraisal Report
(as defined below). The EPA stipulated that it can be terminated if any closing
condition is not met by February 29, 2020 (“Long Stop Date”) by either the Company
or Huifeng, where applicable, sending written notice to the other.
On February 26, 2020, the 21st Meeting of the 8th session of the Board of Directors of
the Company approved the Signing of a Supplemental Agreement to the EPA. On
February 27, 2020, the Company executed the Supplemental Agreement to the EPA
(“First Supplemental Agreement”) with Huifeng to extend the Long Stop Date from
February 29, 2020 to June 30, 2020.
As the closing conditions under the EPA were not fully met by June 30, 2020, the
Company disclosed a Progress Report on the Transaction which stated that the
Company and Huifeng were actively promoting the Transaction in good faith, and
neither intended to terminate the Transaction after June 30, 2020, due to the closing
conditions not yet being fully met.
For details, please see the Announcement on the Resolutions of the 18 th meeting of
the 8th session of the Board (announcement No. 2019-53), the Announcement on the
Acquisition of 50% of the Equity Interests in Shanghai Dibai Plant Protection Co.,
Ltd. (announcement No. 2019-54), the Announcement on the Resolutions of the 21st
meeting of the 8th session of the Board (announcement No. 2020-7), the
Announcement on Signing the Supplemental Agreement to the Equity Purchase
Agreement (announcement No. 2020-9) and the Announcement on the Progress of the
Acquisition of 50% of the Equity Interests in Shanghai Dibai Plant Protection Co.,
Ltd. (announcement No. 2020-35) which were disclosed by the Company on the
website www.cninfo.com.cn separately on November 7, 2019, February 27, 2020 and
July 1, 2020.
As the closing conditions have not yet been met, and related assets appraisal
organization has issued the appraisal report of this Transaction (“Appraisal Report”),
on October 28, 2020, the 27th meeting of the 8th session of the Board approved the
signing with Huifeng of the Second Supplemental Agreement to the EPA regarding
the Acquisition by the Company of a 50% Equity Stake in Dibai (“Second
Supplemental Agreement”).
II．Key Terms of the Second Supplemental Agreement
1. The Company and Huifeng agree that, based on the Appraisal Report, the purchase
price payable under this Transaction shall be adjusted and be equal to (RMB
600,000,000 less net debt at closing) ×50%, meaning that the estimated purchase price
on a cash-free, debt-free basis will be adjusted from RMB 370 million to RMB 300
million, comparing with the EPA. Based on the above, the payment arrangement of
this Transaction will be adjusted correspondingly, according to which (i) the amount
to be paid by the Company within five business days after the approval by Huifeng’s
shareholders meeting or the approval by the government authorities or authorized
entities of the Company in charge of supervision and administration of state-owned
assets (whichever comes later) will remain the same which equals to RMB 30 million;
(ii) the amount that shall be paid by the Company to Huifeng at closing shall be
adjusted from 340 million to RMB 270 million, of which the amount that shall be paid
directly to Huifeng will be adjusted from RMB 310 million to 240 million and the
amount to the escrow will remain the same which equals to RMB 30 million.
2. The Company and Huifeng agree to extend the Long Stop Date from June 30, 2020
to December 31, 2020.
3. The Second Supplemental Agreement is an integral part of the EPA. Unless
specifically revised by the Second Supplemental Agreement, the contents of the EPA
and the First Supplement Agreement will remain the same.
III. Impact of the Second Supplemental Agreement on the Company
The Second Supplemental Agreement reflects the agreed outcome of negotiations
between the Company and Huifeng. It will have no adverse impact on the
performance and business operations of the Company. It will also not impact the
future development strategy and business plan of the Company. The interests of the
shareholders will not be harmed.
IV. Filling Documents
1. The Resolutions of the 27th Meeting of the 8th Session of the Board;
2. The Second Supplemental Agreement to the Equity Purchase Agreement.
It is hereby resolved.
Board of Directors of ADAMA Ltd.
October 29, 2020
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