DESUN SERVICES (02270) signs Debt Assignment Agreement and Debt Repayment Agreement.

DESUN SERVICES (02270) announced that on November 18, 2024 (after trading hours), Chengdu Yulai, the original debtor, Chengdu Desun, and the original creditors entered into a debt transfer agreement. According to this agreement, the original debtor agreed to transfer, and Chengdu Yulai agreed to assume the receivables owed by the original debtor to Chengdu Desun and/or the original creditors, with a total amount of approximately RMB 23225 million. Of this amount, (i) the total amount owed by the original debtor to Chengdu Desun is approximately RMB 1604.78 million; and (ii) the total amount transferred by the original creditors to Chengdu Desun is RMB 717.722 million, i.e. the amounts owed/receivable by each original creditor to/from each original debtor. On November 18, 2024 (after trading hours), the Company's wholly-owned subsidiary Chengdu Desun entered into a debt settlement agreement with Chengdu Yulai, under which Chengdu Desun agreed to purchase the debt settlement property from Chengdu Yulai for a total consideration of RMB 2322.5 million, to be set off against the receivables on an equal basis. Chengdu Yulai agreed to waive the remaining consideration (i.e. RMB 12.8 million), and Chengdu Desun has no obligation to pay this remaining consideration. The debt settlement property is a commercial property located in Chenghua District, Chengdu City, Sichuan Province, China, with a total building area of approximately 989.54 square meters. The announcement stated that through the debt transfer agreement and debt settlement agreement, Chengdu Desun will be able to recover its receivables. The property has been independently valued by a valuer at a total value of RMB 2560 million, exceeding the agreed debt repayment amount under the debt settlement agreement, i.e. RMB 2322.5 million. If the Group decides to sell the debt settlement property in the future, it could generate cash flow for the Group. This will help reduce the Group's receivables risk and is in the interest of shareholders.