A-Living Services Co., Ltd. (SEHK:3319) entered into a framework agreement to acquire 65% stake in Harbin Jingyang Property Management Co., Ltd. from Song Guodong and Li Liguang on January 23, 2019. The parties shall enter into a formal agreement. A-Living Services Co., Ltd entered into a formal agreement to acquire 60% stake in Harbin Jingyang Property Management Co., Ltd from Song Guodong and Li Liguang for approximately CNY 110 million on February 26, 2019. The consideration shall be paid in cash as to 10% upon signing the formal agreement and remaining 90% upon completion of all the relevant business registration and filing procedures. Part of consideration is based on a performance target for the three years ending December 31, 2021 and in case of shortfall, Song Guodong shall compensate A-Living Services. The consideration shall be subject to adjustment as per the consideration calculation multiple. Under the formal agreement, first installment of CNY 11.4 million will be paid within 20 business days upon satisfaction of all the conditions precedent under the formal agreement, A-Living Services shall pay CNY 7.97 million and CNY 3.42 million to the Song Guodong and Li Liguang respectively. Upon payment of the first instalment, A-Living Services has the right to assign financial personnel to assist and supervise the financial matters of Harbin Jingyang Property Management and the second instalment of CNY 102.5 million within 20 business days upon completion of change of shareholder(s), legal representative, director(s), supervisor(s), general manager, financial responsible officer(s) and articles of association of the Harbin Jingyang Property Management, A-Living Services shall pay CNY 71.7 million and CNY 30.75 million to the Song Guodong and Li Liguang respectively. A-Living Services shall acquire stake in Harbin Jingyang Property Management as per 47% from Song Guodong and 18% from Li Liguang. In formal agreement, A-Living Services shall acquire stake in Harbin Jingyang Property Management as per 42% from Song Guodong for CNY 79.72 million and 18% from Li Liguang for CNY 34.2 million. In a related transaction, A-Living Services shall acquire further 27% in Harbin Jingyang Property Management from Song Guodong after 2021. The consideration shall be funded from internal resources. Upon completion, Harbin Jingyang Property Management will become a non-wholly owned subsidiary of A-Living Services. For the year ended December 31, 2018, Harbin Jingyang Property Management reported profit before tax of CNY 26.04 million, profit after tax of CNY 19.45 million and net asset value of CNY 35.7 million. The deal is subject to Harbin Jingyang Property Management remaining as a limited liability company and is being legally established and validly existing in accordance with relevant PRC laws, rules and regulations, and Harbin Jingyang Property Management having obtained all the necessary approvals and permissions for its establishment; all internal approval procedures of Harbin Jingyang Property Management have been completed in accordance with the relevant articles of association and the applicable rules and regulations before entering into the formal agreement; certain due-diligence findings which the A-Living Services require rectification by the Song Guodong and Li Liguang and the Harbin Jingyang Property Management having been completed and Harbin Jingyang Property Management’s equity restructuring having been completed (an aggregate of 8% equity interest of the Song Guodong in the Harbin Jingyang Property Management having been transferred to other shareholders). Unless waived by A-Living Services in writing, all the above conditions precedent have to be fulfilled on or before March 31, 2019. If the conditions precedent are not fulfilled on or before the period, unless a consent has been obtained from each party, A-Living Services has the right to terminate the formal agreement on the period and claim damages against the Song Guodong and Li Liguang. Completion of the transaction shall take place on the date of completion of the share transfer registration and the business registration of the Harbin Jingyang Property Management.