(Yicai Global) Dec. 5 -- Gree Real Estate aims to restart the purchase of Zhuhai Duty Free Enterprises Group, a leading tax-free retailer in China, after replacing its probed chairman.

The property firm intends to pay in cash and by issuing new shares to no more than 35 select investors, the Zhuhai-based buyer said in a statement recently. But no final agreement has been reached yet so there are uncertainties, it added.

Trading of Gree Real Estate’s shares [SHA: 600185] is suspended since today with a maximum duration of five days.

In October 2020, Gree Real Estate proposed purchasing Zhuhai Duty Free for CNY12.2 billion (USD1.8 billion), and more than 90 percent of that was supposed to be funded via issuing new shares. However, the plan was put on hold after the firm's former chief Lu Junsi was suspected of insider trading, based on a statement from December 2020. Last month, Gree Real Estate chose Chen Hui as its new chairman.

The China Securities Regulatory Commission stipulates that any firm that plans to issue shares to purchase assets cannot have any investigations by judicial organs or itself for suspected violations of laws and regulations.

Founded in 1987, Zhuhai Duty Free is China's only retailer engaged in duty-free, duty-paid, and cross-border businesses. The firm has boosted its net profit margin to surpass 10 percent in recent years while keeping its gearing ratio below 40 percent. It has CNY500 million (USD71.9 million) in registered capital.

The two companies are linked. Zhuhai State-Owned Assets Supervision and Administration Commission holds a 77 percent stake in Zhuhai Duty Free while the state-owned asset manager is also the largest shareholder of Gree Real Estate with its nearly 45 percent stake. Another big equity holder of the retailer is Zhuhai Urban Construction Group, holding 23 percent of all stock.

Editor: Emmi Laine, Xiao Yi