Bejing, China-based sports footwear and sportswear company Li Ning Company, Ltd is reporting that it has entered into a joint venture (JV) to develop and operate the Li Ning Brand business exclusively outside of Mainland China, principally in an area that includes Hong Kong, Macau Special Administrative Region, and Taiwan.
The JV will manage and control:
- the business of designing, manufacturing, procurement, distribution, wholesale, logistics, and retail;
- market products carrying the Li Ning brand;
- provide other general support services; and
- other business approved with the Requisite Approval.
Li Ning Company, Ltd, excluding the JV Group, will continue to design, manufacture, procure, and market products bearing the Li Ning Brand in Mainland China.
The company said that LN Co., an indirect wholly-owned subsidiary of Li Ning Company, Ltd, entered into a Subscription and Shareholders’ Agreement with Founder Co., HongShan Venture, HongShan Motivation, and the JV Company to form the JV Company in the British Virgin Islands and subscription of JV Shares by each of the JV parties.
Immediately following completion, the total share capital of the JV Company will be HK$200 million, of which the LN Co., Founder Co., HongShan Venture, and HongShan Motivation will contribute HK$58 million, HK$52 million, HK$62.7 million, and HK$27.3 million in cash, respectively, accounting for 29 percent, 26 percent, 31.36 percent, and 13.64 percent of the total share capital of the JV Company, respectively.
Li Ning Company, Ltd. operates and reports in the Hong Kong dollar (HK$) currency.
The JV parties intend to use their respective resources to assist the JV Group in building its independent operating capabilities, achieving long-term development of the Li Ning brand overseas, and seek opportunities for listings in the future.
As of this announcement’s date, Mr. Li Ning is an executive director, a joint CEO of the company, and a connected person under Chapter 14A of the Listing Rules. Founder Co. is wholly owned by Mr. Li and is, therefore, an associate of Mr. Li. Founder Co. is also a connected person of the company. Accordingly, the formation of the JV Company constitutes a connected transaction of the company under Chapter 14A of the Listing Rules.
Image courtesy Li Ning Company, Ltd.
