China Jishan Holdings on Wednesday terminated an agreement to sell its stake in the real estate unit, raising concerns the company may lose its potential cash company status and suspend trading on the Singapore Exchange (SGX).
Shares in the company fell as much as 10 percent to S$0.162 on the SGX.
China Jishan, in December, announced a sale of unit Shao Xing Yue Sheng Real Estate Property Development for about 785.8 million Chinese yuan (S$161.9 million) to Shanghai Jintumu Real Estate.
The original purchase price was, however, adjusted to 1.18 billion yuan following an independent valuation that assigned a higher value to Shao Xing Yue Sheng's net assets.
China Jishan said that the purchaser, Shanghai Jintumu Real Estate Co, did not agree to the revised price. China Jishan therefore decided to terminate the deal.
As per Singapore listing requirements, companies should have minimum standards of operations and issuers whose assets consist wholly or substantially of cash and short-dated securities are not normally listed.
China Jishan Holdings, which ceased its printing and dyeing businesses, now has no other business operations after the proposed disposal was called off.
China Jishan's stock now faces trading suspension after which the company would have 12 months to acquire a new business that satisfies requirements for a new listing, and in that period the company's cash and short-dated securities must be placed in escrow.
