TIDMACHL
RNS Number : 2066U
Asian Citrus Holdings Ltd
11 October 2010
For immediate release
11 October 2010
ASIAN CITRUS HOLDINGS LIMITED
(Stock Code: HKSE: 00073; AIM: ACHL)
Acquisition of Beihai BPG Food & Beverage
Asian Citrus, the largest orange plantation owner and the single largest orange
producer in China, announces that further to the Memorandum Of Understanding
announced on 7 September 2010, it has now entered into an agreement to acquire
the entire equity interest in Top Honest Holdings Limited ("Top Honest") and
Fame Zone Limited ("Fame Zone"). Top Honest and Fame Zone, through their wholly
owned subsidiaries, respectively hold 92.28% and 0.66% equity interest in Beihai
Perfuming Garden Juice Company Limited ("Beihai BPG"), for an aggregate
consideration of approximately HK$2,040 million.
The Consideration for the Acquisition is approximately HK$2,040 million (GBP165
million**) which shall be satisfied (i) as to HK$780,000,000 (GBP63,000,000**)
of Cash Consideration by way of execution of Deeds of Payment Undertaking by the
Company in favour of Sunshine Hero and the Bondholders; and (ii) the balance of
approximately HK$1,260 million (GBP102 million**) by the allotment and issue of
the Consideration Shares at an issue price of HK$7.68 (62.16 pence**) per Share
to the Vendors.
Beihai BPGis headquartered in the Guangxi Zhuang Autonomous Region and is a
leading producer and seller of tropical fruit juice concentrates, fruit purees
and quick-frozen fruits in the PRC with an annual production capacity of over
60,000 tonnes. Beihai BPG's production sites are located in Beihai and Hepu in
Guangxi Province with a combined site area of approximately 109,000 square
metres. Beihai BPG processes over ten different types of tropical fruits,
includingpineapples, passion fruit, lychees, mangoes and papayas. Beihai BPG
currently generates most of its sales from the PRC market, with key customers
being beverage mixers supplying major beverage groups.
The Group is one of the largest orange producers in the PRC with a national
market share of approximately 2% to 3% in 2009, according to a research by
Guangxi Citrus Research Institute. Leveraged on this scale of orange production,
the Group is posed to expand the scope of its operations by acquiring this
business of fruit juice concentrate production, as well as to diversify the
Group's source of income.
The Company considers that the vertical integration into downstream fruit juice
concentrate production will create synergies to the Group after Completion,
including among other considerations, cost reduction, stability and flexibility
in supply and sharing of market information which should give the Group an
advantageover its competitors.
Beihai BPG has established long-term relationships with a number of major
customers, including large international food and beverage companies. Its active
business relationships with its top ten customers are over five years. The
Company considers that the extensive client base of the Target Group will become
a valuable asset of the Group after Completion and add to the Group existing
client base.
The increasing consumption per capita in the PRC in conjunction with the rising
health consciousness among PRC consumers has created a booming, though largely
unexploited fruit juice market in the PRC. Leveraging on Beihai BPG's leading
position in fruit juice production, the Company considers that Beihai BPG will
continue to enjoy robust performance and contribute to the Group's profit, given
Beihai BPG's well-established operations and profitable track record in
combination with the positive outlook of the fruit juice market in the PRC and
the proliferation of fruit juice consumption among PRC consumers who are
becoming increasingly health-conscious.
According to a report issued by the China Beverage Industry Association in 2010,
Beihai BPG was the largest supplier of tropical fruit juice concentrates in the
PRC from 2007 to 2009 in terms of production volume and had a production volume
three times larger than its next closest localcompetitor. Beihai BPG was also
the largest producer of pineapple juice concentrate and lychee juice concentrate
from 2007 to 2009, each having a production volume several times larger than its
next closest localcompetitor for the respective products.
The Consideration for the Acquisition is approximately HK$2,040 million (GBP165
million**) which shall be satisfied as to:
(i) HK$780,000,000 (GBP63 million**) of Cash Consideration by the way of
execution of Deeds of Payment Undertaking to Sunshine Hero and the Bondholders;
and
(ii) the balance of approximately HK$1,260,000,000 (GBP102 million**) by
the allotment and issue of the 164,153,646 Consideration Shares to the Vendors
and the Bondholders.
The Deeds of Payment Undertaking shall be issued to Sunshine Hero and the
Bondholders, and the Consideration Shares shall be allotted and issued, credited
as fully paid, to the Vendors and the Bondholders on the Completion Date.
The amount of Cash Consideration payable and the number of Consideration Shares
to be allotted and issue to each of the Vendors and the Bondholders are as
follows:
+-------------+------------------------+----------+------------------------+
| Vendors | Cash Consideration | | Consideration Shares |
| and | | | |
| Bondholders | | | |
| | | | |
+-------------+------------------------+----------+------------------------+
| | HK$ | | Number of shares |
+-------------+------------------------+----------+------------------------+
| Sunshine | 577,185,610 | | 116,692,681 |
| Hero | | | |
+-------------+------------------------+----------+------------------------+
| | | | |
+-------------+------------------------+----------+------------------------+
| Excel | - | | 6,456,902 |
| Blaze | | | |
+-------------+------------------------+----------+------------------------+
| | | | |
+-------------+------------------------+----------+------------------------+
| Billion | 85,698,473 | | 17,326,116 |
| Ally | | | |
| | 19,745,824 | | 3,992,118 |
| Billion | | | |
| Step | | | |
+-------------+------------------------+----------+------------------------+
| | | | |
+-------------+------------------------+----------+------------------------+
| Beauty | | | |
| Treasure | 13,190,530 | | 2,666,799 |
+-------------+------------------------+----------+------------------------+
| | | | |
+-------------+------------------------+----------+------------------------+
| LCII | 52,682,177 | | 10,651,036 |
| Pineapple | | | |
| | 31,497,386 | | 6,367,994 |
| Greater | | | |
| China PE | | | |
| Fund | | | |
+-------------+------------------------+----------+------------------------+
| | | | |
+-------------+------------------------+----------+------------------------+
| Total | 780,000,000 | | 164,153,646 |
+-------------+------------------------+----------+------------------------+
The Bondholders have undertaken that in the event that there is Early Repayment
under the Agreement, they will not, without prior written consent of the
Purchaser, at any time from the date of issue of the Consideration Shares up to
and including the date falling six months after such date dispose of their
respective Consideration Shares.
Sunshine Hero has undertaken that it will not without prior written consent of
the Purchaser, at any time from the date of issue of the Consideration Shares up
to and including the date falling two years after such date dispose of its
Consideration Shares.
The Consideration was determined after arm's length negotiation between the
Purchaser and the Vendor with reference to (i) the performance of Beihai BPG and
its subsidiaries (collectively known as the "Beihai Group"); (ii) the net assets
of the Beihai Group as at 30 June 2010 (iii) the growth potential of the
business of the Beihai Group; and (iv) the possible future earnings contribution
from the Beihai Group.
The issue price of HK7.68 (62.16 pence**) per Consideration Share represents:
(i) a discount of approximately 9.65% to the closing price of HK$8.50
per Share as quoted on the Stock Exchange on 11 October 2010, being the date of
the Agreement;
(ii) a discount of approximately 3.52% to the average of the closing
prices of the Shares as quoted on the Stock Exchange over the last 5 consecutive
trading days up to and including 11 October 2010 of HK$7.96 per Share;
(iii) a discount of approximately 0.52% to the average of the closing
prices of the Shares as quoted on the Stock Exchange over the last 10
consecutive trading days up to and including 11 October 2010 of HK$7.72 per
Share;
(iv) a premium of approximately 3.78% over the average of the closing
prices of the Shares as quoted on the Stock Exchange over the last 20
consecutive trading days up to and including 11 October 2010 of HK$7.40 per
Share; and
(v) a premium of approximately 64.10% over the Company's unaudited net
asset value per Share of RMB4.02 (equivalent to approximately HK$4.68) as at 31
December 2009.
In the event that (i) there is Early Repayment under the Agreement; and (ii) the
Actual Profits and the Actual Expenses have yet to be determined on such date of
Early Repayment under the Agreement, each of Sunshine Hero and the Bondholders
shall, within five Business Days of the date of the Early Repayment under the
Agreement, deposit their respective Consideration Shares or, in case the
Consideration Shares have been disposed of, "the equivalent amount of cash, with
the Escrow Agent in accordance with the terms and conditions of the Escrow
Agreement.
The Consideration Shares, when issued, will rank pari passu with all other
Shares currently in issue. The Consideration Shares will be issued under a
specific mandate.
The Consideration Shares represent approximately (i) 19.06% of the existing
issued share capital of the Company; and (ii) 16.01% of the share capital of the
Company as enlarged by the issue of the Consideration Shares. An application
will be made by the Company to the Listing Committee for the listing of and
permission to deal in the Consideration Shares. Application will also be made
for the Consideration Shares to be admitted to trading on AIM.
Principal terms of the Deeds of Payment Undertaking
+----------------+----------+------------------------------------------+
| Aggregate | : | HK$780,000,000 |
| amount | | |
| | | |
+----------------+----------+------------------------------------------+
| Maturity Date | : | 31 May 2011 |
| | | |
| Interest | : | Interest free |
| | | |
| Repayment | : | To be repaid on the Maturity Date or the |
| | | Early Repayment Date (whichever is |
| | | earlier), the Repaid Amount is subject |
| | | to adjustment in accordance with the |
| | | conditions and formula as defined in the |
| Default | : | Agreement |
| interest | | |
| | | 3% per month accrued on the amount from |
| | : | the due date up to the date of actual |
| Ranking | | payment |
| | | |
| | | Each of the Deeds of Payment Undertaking |
| | | shall rank senior to any other unsecured |
| | | and unsubordinated creditors of the |
| | | Company, but pari passu to each other |
| | | Deeds of Payment Undertaking |
| | | |
+----------------+----------+------------------------------------------+
The following table sets out the shareholding structures of the Company (i) as
at the date of this announcement; and (ii) immediately after the allotment and
issue of the Consideration Shares, assuming that there would be no change in the
issued share capital of the Company between the period from the date of this
announcement to the date of issuance of the Consideration Shares:
+--------------+-------------+----------+-------------+----------+---------------+----------+-------------+
| | As at the date of this | Immediately after the allotment and issue |
| | announcement | of the Consideration Shares |
+--------------+--------------------------------------+---------------------------------------------------+
| | No. of | | Approximate | | No. of | | Approximate |
| | Shares | | % | | Shares | | % |
+--------------+-------------+----------+-------------+----------+---------------+----------+-------------+
| | | | | | | | |
+--------------+-------------+----------+-------------+----------+---------------+----------+-------------+
| Market | 271,223,153 | | 31.49 | | 271,223,153 | | 26.45 |
| Ahead | | | | | | | |
| Investments | | | | | | | |
| Limited | | | | | | | |
| (Note 1) | | | | | | | |
+--------------+-------------+----------+-------------+----------+---------------+----------+-------------+
| | | | | | | | |
+--------------+-------------+----------+-------------+----------+---------------+----------+-------------+
| Huge | 163,014,026 | | 18.93 | | 163,014,026 | | 15.90 |
| Market | | | | | | | |
| Investments | | | | | | | |
| Limited | | | | | | | |
| (Note 2) | | | | | | | |
+--------------+-------------+----------+-------------+----------+---------------+----------+-------------+
| | | | | | | | |
+--------------+-------------+----------+-------------+----------+---------------+----------+-------------+
| Sunshine | - | | - | | 116,692,681 | | 11.38 |
| Hero | | | | | | | |
+--------------+-------------+----------+-------------+----------+---------------+----------+-------------+
| | | | | | | | |
| Excel | - | | - | | 6,456,902 | | 0.63 |
| Blaze | | | | | | | |
| | | | | | | | |
+--------------+-------------+----------+-------------+----------+---------------+----------+-------------+
| Billion | - | | - | | 17,326,116 | | 1.69 |
| Ally | | | | | | | |
| | | | | | | | |
+--------------+-------------+----------+-------------+----------+---------------+----------+-------------+
| Billion | - | | - | | 3,992,118 | | 0.39 |
| Step | | | | | | | |
| | | | | | | | |
+--------------+-------------+----------+-------------+----------+---------------+----------+-------------+
| Beauty | - | | - | | 2,666,799 | | 0.26 |
| Treasure | | | | | | | |
| | | | | | | | |
+--------------+-------------+----------+-------------+----------+---------------+----------+-------------+
| LCII | - | | - | | 10,651,036 | | 1.04 |
| Pineapple | | | | | | | |
| | | | | | | | |
+--------------+-------------+----------+-------------+----------+---------------+----------+-------------+
| Greater | - | | - | | 6,367,994 | | 0.62 |
| China PE | | | | | | | |
| Fund | | | | | | | |
+--------------+-------------+----------+-------------+----------+---------------+----------+-------------+
| | | | | | | | |
+--------------+-------------+----------+-------------+----------+---------------+----------+-------------+
| Public | 427,083,915 | | 49.58 | | 427,083,915 | | 41.64 |
| Shareholders | | | | | | | |
+--------------+-------------+----------+-------------+----------+---------------+----------+-------------+
| | | | | | | | |
+--------------+-------------+----------+-------------+----------+---------------+----------+-------------+
| Total | 861,321,094 | | 100.00 | | 1,025,474,740 | | 100.00 |
+--------------+-------------+----------+-------------+----------+---------------+----------+-------------+
Notes:
(1) Market Ahead Investments Limited is a company incorporated in the BVI, the
issued share capital of which is beneficially owned as to 76% by Mr. Tong Wang
Chow, the Chairman and an executive Director, 6% by Mr. Tong Hung Wai, Tommy, an
executive Director, 6% by Mrs. Tong Lee Fung Kiu, 6% by Ms. Tong Mei Linand 6%
by Mr. Lee Kun Chung.
(2) The entire issued share capital of Huge Market Investments Limited is held
by Chaoda Modern Agriculture (Holdings) Limited.
** HK$1.00 : 12.355 pence
For further information please contact:
Weber Shandwick Financial Tel:
020 7067 0700
Nick Oborne, Stephanie Badjonat, John Moriarty
J.P. Morgan Cazenove Tel:
020 7742 4000
James Mitford, Gina Gibson
This information is provided by RNS
The company news service from the London Stock Exchange
END
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