Item 1.01 Entry Into a Material Definitive Agreement.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-balance Sheet Arrangement of a Registrant.
On December 8, 2005, Great China International Holdings, Inc., entered into an agreement to acquire through its indirect subsidiary, Shenyang Maryland International Industry Co. Ltd., 70 percent of the equity interest in Shenyang Xinchao Development Co. Ltd, a Sino-Foreign joint venture corporation with a registered initial capital of RMB100 million that was formed for the purpose of owning and developing the Xita Project. The Xita Project, also known as the “Korean City” is located in the Xi Ta district of Shenyang, China. Development and construction of the Xita Project is estimated to require at least three years.
Shenyang Xinchao owns approximately 65.85 percent of the land for the Xita Project. The remainder is owned by Shenyang Yindu Property Co., Ltd., which is also a Sino-Foreign joint venture corporation formed for the purpose of acquiring a portion of the land for the Xita Project to minimize fees and other costs associated with the acquisition of the land. Shenyang Yunfeng Real Estate Development Co. Ltd., owns 70 percent of the equity interest in Shenyang Xinchao and 70 percent of the equity interest in Shenyang Yindu. The remaining 30 percent of the equity interest in Shenyang Xinchao and Shenyang Xindu is owned by I.R.E. Corporation Limited, an unrelated Singapore company.
Jiang Fang and Jiang Peng, who are officers, directors, and principal stockholders of Great China, are the owners of Shenyang Yunfeng Real Estate Development Co. Duan Jingshi, an officer, director, and stockholder of Great China, is the controlling officer of Shenyang Xinchao and Shenyang Yindu.
On December 28, 2005, Silverstrand International Holdings Ltd., a subsidiary of Great China, entered into agreements with I.R.E. Corporation to acquire all of its interest in Shenyang Xinchao and Shenyang Yindu, and Shenyang Maryland International Industry Co., a subsidiary of Silverstrand International Holdings, revised its agreements with Shenyang Yunfeng Real Estate Development for acquisition of all of its interest in Shenyang Xinchao and Shenyang Yindu. The transactions will close after April 30, 2006, but before June 30, 2006, at which time Great China will own through its subsidiaries 100 percent of the land and related interests comprising the Xita Project.
The total purchase price for the interests acquired from I.R.E. Corporation is assumption of the obligations under the joint venture arrangements to contribute I.R.E. Corporation’s proportionate share of the equity capital, which is a total of RMB45 million for both joint ventures.
With respect to the interests to be acquired by Shenyang Maryland International Industry Co. from Shenyang Yunfeng Real Estate Development, the parties agreed to revise their earlier agreement from December 8, 2005, to fix the purchase price at RMB70 million, which is
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