Fu Yu unit sells land-use rights & buildings in Shanghai

Mainboard-listed Fu Yu Corporation’s subsidiary has agreed to sell land-use rights and buildings in a Free Trade Zone in Shanghai.

These comprise land-use rights – of an area of 33,280 square metres – which run from 1 March 1996 to 28 February 2046.

The deal also includes a 3-storey production-cum-warehouse building with ancillary office of a gross floor area of 8,031 square metres.

The total sale consideration was 45 million yuan or about S$9.2 million.

The buyer will lease the properties to Fu Yu Moulding & Tooling Shanghai for four years. It will be rent free for the first and second year.

The rental for the third and fourth year will be 2.8 million yuan per annum.

Fu Yu said it believes the sale will improve the group’s cash flow position and at the same time reduce its reliance on bank borrowings.

It said it will use about S$6.16 million of the net proceeds to repay bank borrowings by its China subsidiaries.

It will also use about S$1.95 million of the net proceeds as working capital.

Source : Channel NewsAsia – 6 Jul 2010

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