Tg Smart Energy (01083) announced that on October 25, 2024, the company entered into a transfer agreement with its controlling shareholder China Gas (00003) and Famous House (a wholly-owned subsidiary of China Gas), whereby:

(a) China Gas and Famous House will ensure that Famous House and its subsidiaries or affiliated companies hold and operate the extended business of China Gas and own the assets of China Gas's extended business in China, making Famous House the holding company of China Gas's extended business;

(b) Famous House Chengdu will acquire all 49% equity of Group B companies (engaged in extended business) held by the group at a total price of RMB 22.432 million (or any other amount agreed upon by the parties) to make Group B companies wholly owned by Famous House Chengdu;

(c) The company will:

(i) restructure so that the direct or indirect equity and higher value functions of several companies directly or indirectly engaged in extended business (i.e., Famous House Chengdu and Group A companies) within the group will be consolidated under the target company as the holding company platform, and then all equity of the target company will be transferred to a wholly owned subsidiary of Famous House; and

(ii) ensure that several other companies in the group holding equity (i.e., the transfer companies) transfer their transfer extended businesses to new suppliers in exchange for approximately 12% equity in Famous House (adjustable); and

(d) The transferring company will transfer their target assets to the new supplier in exchange for a cash price equivalent to the book value of those assets (or any other amount related as agreed by the contracting parties).

It is reported that the target company is an investment holding company and will become the holding company of the extended business of the group after the completion of the restructuring of tg smart energy's extended business; thereafter, the famous family will acquire all its equity indirectly through the transfer of tg smart energy's extended business.

Group A companies are mainly engaged in extended business, with Famous Family Chengdu holding 51% equity and a wholly-owned subsidiary of the company (a limited liability company established in China) holding 49% equity. Group B companies are mainly engaged in extended business, with Famous Family Chengdu holding 51% equity and a non-wholly-owned subsidiary of the company holding 49% equity.

After the completion of the transaction, the group will no longer engage in or hold any significant equity in the extended business other than the equity held by Famous Family. The group will then focus on developing its core energy business, including gas and wind power, in line with the company's long-term goal of developing green energy. As the company receives new shares from Famous Family as part of the consideration for transferring its extended business, the company will hold shares in Famous Family and continue to maintain a strategic interest in the extended business. Furthermore, after the completion of the transaction, Famous Family will be in a better position to attract new investments from strategic investors when appropriate, and the company as a shareholder of Famous Family will benefit from Famous Family's sustained growth.