Urban Beauty Announces Change Of Controlling Shareholder

City Beauty (02298-HK) announced that Datong share repurchase board was informed that in November 1, 2019, Datong agreed to establish a restructuring agreement with Xin Feng, Hongye and Chulong, according to which Datong will buy shares held by Xin Feng, Hongye and Chulong, accounting for about 35.41% of the total issued shares of Datong. As the price for the purchase of Datong shares, Datong will separately transfer the 211402626, 153657633 and 37843009 shares held by the company (which account for 9.40%, 6.83% and 1.68% of all the issued shares of the company respectively) to Xin Feng, Hongye and Chulong.

After the completion of the Datong share repurchase, Datong will become a wholly owned Affiliated Companies of Dacheng and will hold about 735018732 shares (about 32.68% of the total issued share capital of the company), and Xin Feng, Hongye and Chulong will each become the direct shareholder of the company, but that is equal to the effective shareholding of the company, which will not be any gain or loss from the buyback of Datong shares.

In order to terminate the shareholder agreement and change the controlling shareholder to Datong share repurchase, in November 1, 2019, Zheng Xiansheng, Mr. Zhang, Mr. Lin, Cheng, Dacheng, Xin Feng, Hongye, Chulong and Datong concluded a termination agreement to terminate the shareholder agreement. Therefore, in terms of decision-making, operation and management of the company, Zheng Xiansheng, Mr. Zhang, Mr. Lin, Cheng, Dacheng, Xin Feng, Hongye, Chulong and Datong are no longer a group of shareholders who are acting in a consensus manner.

As Mr. Cheng, Dacheng and Datong have the right to exercise more than 30% of the voting rights at the shareholders' meeting of the company, they are regarded as the controlling shareholder of the company according to the definition of the listing rules.

As disclosed in the prospectus, as a part of the reorganization (defined in the prospectus), the controlling shareholder (i.e. Mr. Cheng, Mr. Zhang, Mr. Lin and Mr. Cheng) equals the company's rights and interests in Datong, and since then it has exercised the right to vote in the company through Datong. In April 15, 2014, Zheng Xiansheng, Mr. Zhang, Mr. Lin and Mr. Cheng entered into shareholder agreements with Datong shareholders (that is, Dacheng, Xin Feng, Hongye and Chulong 0) to regulate the operation and management of Datong.