PATEO (02889.HK): Supplemental Pact Routes RMB800m Consideration Through Escrow

NewTimeSpace News: On 12 November 2026, PATEO CONNECT Technology (Shanghai) Corporation (stock code: 2889) announced that it entered into a supplemental agreement with the sellers to the share transfer agreement for the acquisition of a 20% stake in the target company, revising arrangements for payment of the consideration, the escrow account and the release of funds.

As the sellers are offshore institutions that must receive the consideration through their free trade non-resident (FTN) accounts, and given foreign exchange and free trade account rules, the Company cannot pay directly into those accounts before the shares are transferred and the foreign exchange registration is completed, so the parties adopted an escrow arrangement.

Within seven business days of signing, the parties will open an account at Bank of China's Guangzhou Panyu branch under tripartite supervision by the sellers, the Company and the bank. The Company has paid a first deposit of RMB10 million to an individual seller; the remaining RMB190 million is to be paid into escrow, whereupon that seller refunds the first RMB10 million, which the Company pays into escrow the same day, bringing the total RMB200 million deposit into escrow; this was completed by the date of the announcement.

The supplemental agreement does not change the number of shares, the price per share, the total consideration of RMB800 million or the amount of each tranche. The main changes are that the deposit and tranches are all routed through escrow and that the escrow bank must confirm the cross-border remittance documents. The first tranche of RMB200 million is payable within two business days of shareholder approval; once Shenzhen Stock Exchange compliance confirmation is obtained, the transfer documents are sealed and the bank confirms the documents are complete, the RMB200 million deposit becomes the second tranche and the Company pays the third tranche of RMB320 million, with the transfer application filed the same day; the fourth tranche of RMB80 million is payable within two business days of registration. RMB720 million is released on the day registration is completed and RMB80 million when the board and management reorganisation is announced.