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GERG News

2006.11.10

Golden Eagle Acquire Land For RMB 85 million To Build New Store in Jiangsu Yancheng

(9 November 2006 - Hong Kong) - Golden Eagle Retail Group Limited ("Golden Eagle" or the "Company", together with its subsidiaries as the "Group"; HKEX stock code:3308), a premium department store chain in the PRC, announced today that the Company has entered into a purchase agreement for the acquisition of a parcel of land in Yancheng, Jiangsu for the development of a brand new department store.

The alleged site area is estimated to be 11,227 square metres with an expected consideration of RMB 84,610,000 (equivalent to RMB 7,537 per square metre). The final consideration will be subject to the actual site area. The Group intends to set up a new store on the site, which is expected to have a total GFA of approximately 50,000 square metres.

The Group will fund the acquisition with internal resources, including cash and proceeds raised from the Groups initial public offering in March, and the zero-coupon convertible bonds issued in September. Upon completion of the acquisition and setting up of the new store, proportion of the Group's self-owned versus leased operating area is expected to be ramped-up from the current 69%, complementary to the Group's strategy preference to operate on self-owned premise and secure the costs of operation in the long run.

Mr. Roger Wang, Chairman of the Group, commented, "The Group has always targeted second-tier cities in China with strong growth potential, acquiring the site in Yancheng is therefore in line with our overall business objective, and is especially favourable in view of the strong domestic consumption from within Jiangsu Province. We are confident that the new store will reiterate our presence and expand our market share in the Province of Jiangsu."

Mr. Wang continued, "The retail sector in the PRC is growing rapidly which translate into a great opportunity for us to seize the development potential and available market opportunity in the retail industry."

 
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