China Auto Logistics To Buy Tianjin Zhonghe Auto Sales Service - Quick Facts

(RTTNews) - China Auto Logistics Inc. (CALI), a top seller in China of luxury imported automobiles, and a leading provider of auto-related services, said Thursday that on November 30, 2013, its subsidiary, Tianjin Binhai Shisheng Trading Group Co., Ltd. signed an equity transfer agreement with Hezhong International Development Co, Ltd. to acquire Tianjin Zhonghe Auto Sales Service Co., the owner and operator of the Airport International Automall in Tianjin.

The company said it plans to develop the Automall into a key site for what it believes can become one of the largest used car businesses in China.

Following an initial payment of RMB 240 million or about $39.2 million to be paid within 5 days of the signing, the remainder of the agreed purchase price of RMB 559.77 million or about $91.4 million will be paid in three additional annual installments with an annual interest rate of 6%, after which 100% of the equity in the acquisition will be transferred to Shisheng.

In the interim, Shisheng will have operating control of the Automall, although failure to complete all required payments on time could result in termination of the agreement.

The company anticipates utilizing its cash flow and bank borrowings to fund the acquisition. It also will be paying a finder's fee equal to 1% of the purchase price in the form of 340,000 restricted common shares under the terms of a Consulting Agreement, signed separately.