STAR CM (06698) has signed a Restructuring Agreement to simultaneously undertake a Very Substantial Disposal and a Very Substantial Acquisition.
• Disposal: – STAR CM’s wholly-owned unit Mengxiang Qiangyin will surrender its 17.59% stake in Shanghai Binqiao via selective capital reduction. – Consideration totals RMB193.46 million, based on an equity valuation of Shanghai Binqiao at RMB1.10 billion.
• Acquisition: – In exchange, STAR CM will receive 100% of Shanghai Xingkongshui’an from Shanghai Binqiao and assume shareholder loans of about RMB266.13 million. – Xingkongshui’an’s equity was valued at RMB193.70 million; its key asset is the M2-01 commercial and office project at Yangpu Riverside, Shanghai. – Post-deal, Xingkongshui’an becomes an indirect wholly-owned subsidiary and its results will be consolidated.
• Debt Transfer: – The shareholder loan of approximately RMB266.59 million owed by Shanghai Binqiao to Mengxiang Qiangyin will be transferred to Xingkongshui’an. – The loan will be offset against a similar receivable that Shanghai Binqiao holds against Xingkongshui’an, with the RMB0.47 million difference to be settled in cash.
• Financial Impact: – Pro forma data show the Enlarged Group’s 2025 pro forma loss would narrow by RMB2.99 million to RMB115.80 million. – Total assets would rise by RMB265.32 million to RMB2.97 billion; total liabilities would rise by RMB262.33 million to RMB447.50 million.
• Rationale: – The swap gives STAR CM direct ownership of the nearly completed 31,357 sqm M2-01 riverside development, intended to house the company’s regional headquarters and provide leasable space to culture-media partners. – Exiting the minority position in Shanghai Binqiao simplifies structure and aligns assets with core media operations.
• Approvals and Timetable: – The Extraordinary General Meeting to approve the Restructuring Agreement will be held on 29 July 2026. – Completion is expected within four months of signing, following regulatory filings with Shanghai Yangpu District SASAC.
The Board considers the terms fair and in the interests of shareholders and recommends voting in favour at the EGM.