Inner Mongolia M-Grass Ecology and Environment (Group) Company Limited (“M-Grass Ecology” or the “Company”, Stock Code: 300355) obtained from the China Securities Regulatory Commission (“CSRC”) the “Official Reply for Approval of Assets Purchase by Inner Mongolia Hotision & Monsod Drought-Resistance Greening Co., Ltd. through Share Issue to Wang Zaitian and Others and Raising Supporting Funds” (CSRC Approval No.945) on April 29, 2016, which agreed to approve the Company to purchase an aggregate of 60% of the equity interest of Wang Zaitian and the other six shareholders in Xiamen Luluxing Green Project Construction Company Limited (“LLX”) by ways of share issue and cash payment. The transaction amount of this project is RMB 535,500,000 (including RMB 273,000,000 for the transaction of assets purchase through share issue, and the supporting fund to be raised in an amount of RMB 262, 500,000).
M-Grass Ecology is a listing enterprise engaging in the domestication of native plants for ecological restoration, and is the leader in China’s grass ecological restoration and a supplier of large natural pasture. After many years’ development, it has gradually developed into a comprehensive industry-leading enterprise with a complete industrial chain of “R&D :seedling fostering, seedling planting base, sales, engineering design and construction” from a single greening engineering corporation, and has formed into three main businesses including “ecological restoration, modern grass industry, and grass seed industry”. The Company is dedicated to building itself into China’s modern pasture industrial operation platform.
The target Company LLX in this transaction is one of the earliest enterprises in Fujian Province that has obtained a Grade I Urban Landscape Construction Enterprise Qualification Certificate, and mainly engages in urban landscape design and construction and road maintenance, and is focusing on urban landscapes especially municipal landscapes and roads, and highway engineering landscape construction. It has a Grade A Special Landscape Architecture Engineering Design Qualification, Construction Enterprise Qualification Certificate, Highway Maintenance Engineering Construction Qualification Certificate, and Grade A Environmental Health Enterprise Credit Certificate of Fujian Province. It is among the few outstanding landscape enterprises in China that have concurrently owned the above business qualifications.
JunHe provided legal services to the target Company LLX for its A share listing project several years ago, and assisted LLX in sorting out and regulating the trade union nominee holding, employee entrusted shareholding and other legal issues of the Municipal Highway Bureau that was formed in the end of the 1990s. JunHe provided excellent support to LLX for its stepping in to the domestic capital market and won the recognition of LLX with its rigorous, meticulous, solid work style and service concept.
In December 2015, JunHe was engaged by M-Grass Ecology as the special legal advisor of this transaction and participated in the whole process of this project including argumentation, due diligence investigation of the transaction scheme, drafting of relevant documents, preparation of filing materials, and replying to feedback. JunHe’s solid foundation work resulted in the smooth carrying out of this transaction. After this project was filed, no feedback was given by CSRC in respect of LXX’s compliance in its historical development, or whether its equity was clear during the first review meeting, feedback suggestions and subsequent review process. This project was officially initiated in December 2015, successfully submitted to the shareholders meeting for consideration and approval in January 2016, and was unconditionally adopted by the Merger and Reorganization Examination Committee of CSRC in April 2016 together with CSRC’s approval document for this transaction, and was successfully completed in July 2016.
The leading partners of this Project are attorneys ZHANG, Zongzhen and Chen Guiyang.