RCG Holdings, a provider of biometric and RFID products and solution services with a primary focus in the Asia Pacific markets, entered into a non-binding memorandum of understanding with the Xiangyang Development Committee with respect to the development of the Internet of Things (IoT) City Project in Xiangyang city, Hubei Province, PRC (IoT City Project).
To the best of the directors' knowledge, information and belief having made all reasonable inquiry, Xiangyang Development Committee and its ultimate beneficial owners are third parties independent of the company and its connected persons.
Pursuant to the memorandum of understanding, the company will establish a research and development, showroom and production facility in Xiangyang city to promote the development and implementation of RFID, IoT and green technologies in the area. The Xiangyang Development Committee will reserve and assign a parcel of land with a total area of 800 mu for the IoT city project and offer assistance to promote and implement the group's technologies into the Xiangyang city in the areas of health care, financial, transportation, security, hotel management, retail and personal identification and payment systems. In addition to this, the group will also be able to enjoy preferential treatment as a high-technology company from the local government including tax benefits, government funds and subsidies, assistance in recruiting talented staff and facilities and in relationship building with local industries.
Subject to entering into the formal agreements which is expected in the next two months, the Xiangyang Development Committee and the company have established a mutual understanding that the estimated investment required for the IoT City Project is around US$350 million. The company intends to collaborate with experienced parties who would invest and conduct property planning and development on the land, thus enabling the company to focus on implementation of technologies related to the business area in which the group operates. The company may fund its portion of the IoT City Project from methods which the directors consider appropriate with the objective of enhancing shareholder value in the company.