LIANHUA (00980) plans to sell Yangpu Century Lianhua to Bailian Group.

LIANHUA (00980) announced that the company intends to sell all the equity held by its direct wholly-owned subsidiary, Shanghai Century LIANHUA Development Co., Ltd. ("Century Lianhua"), in Shanghai Century LIANHUA Yangpu Co., Ltd. ("Yangpu Century Lianhua") to Shanghai Petrochemical Co., Ltd., an indirect wholly-owned subsidiary of Bailian Group Co., Ltd. ("Bailian Group"). The price of the proposed sale will be based on an evaluation report prepared by an independent appraiser filed with the competent authority, and will be agreed upon by all parties and stipulated in the formal equity transfer agreement. Yangpu Century Lianhua mainly operates large-scale comprehensive supermarkets in the Yangpu District of Shanghai and Henan Province. The Board further announced that after the proposed sale is finalized and completed, the company plans to enter into a proposed management agreement with Shanghai Petrochemical, under which the company agrees to provide management and resource support services to Yangpu Century Lianhua in accordance with the terms of a formal management agreement to be entered into with Shanghai Petrochemical. The announcement stated that the proposed sale is mainly based on the company's overall strategic considerations for sustainable healthy development and enhancing overall performance in the medium to long term. The company has comprehensively considered factors such as market and competitive environment, store operating conditions, network value, and supply chain impact, and intends to focus on the development of core businesses in Shanghai and Zhejiang through further asset divestment. To ensure a smooth transition and stable operation for Yangpu Century Lianhua after the proposed sale is completed, the group will leverage its own brand, products, and management advantages to provide entrusted management to Yangpu Century Lianhua on behalf of Shanghai Petrochemical. The group will also provide related resource support to Yangpu Century Lianhua, including personnel management support, brand support, information system support, and product supply support, to help it achieve new business goals.