Jingwei Textile Machinery to buy 36% stake in Zhongrong Trust

28 Jan '10

3 min read

The Board of Jingwei Textile Machinery Company Limited entered into the conditional Acquisition Agreement with the Vendor. Pursuant to the Acquisition Agreement, the Company has agreed to acquire the Sale Interest at the Consideration of initially RMB1.2 billion (equivalent to approximately HK$1,363.64 million), subject to adjustments.

Pursuant to the terms of the Acquisition Agreement, the Consideration shall be settled in cash. Upon Completion, the Company will own 36% equity interest in Zhongrong Trust and will secure effective control over it by virtue of its control over the board of Zhongrong Trust. Accordingly, Zhongrong Trust will become a subsidiary of the Company and its financial results will be consolidated into the financial statements of the Group.

The Acquisition constitutes a very substantial acquisition on the part of the Company under Chapter 14 of the Listing Rules. Accordingly, the Acquisition Agreement and the transactions contemplated there under are subject to the approval of Shareholders at the EGM. As no Shareholder has any material interest in the Acquisition, no Shareholder is required to abstain from voting at the EGM to approve the Acquisition Agreement and the transactions contemplated there under.

A circular containing, among other matters, further details of the Acquisition and a notice convening the EGM, will be despatched to Shareholders in compliance with the Listing Rules.

As at the date of this announcement, Zhongzhi Group was owned as to 80% by Liu Yang and 20% by the Committee of the Employee Association of Zhongzhi Group. To the best of the Directors' knowledge, information and belief having made all reasonable enquiry, the Vendor and its ultimate beneficial owners are third parties independent of the Company and connected persons of the Company, and there shall be no restriction for any subsequent sale of the Sale Interest acquired by the Group.

Assets to be acquired
Pursuant to the Acquisition Agreement, the Company has conditionally agreed to acquire and the Vendor has conditionally agreed to dispose of the Sale Interest, representing 36% equity interest in the entire registered capital of Zhongrong Trust.

Consideration and pricing basis
The Consideration for the Acquisition of not more than RMB1.2 billion (equivalent to approximately HK$1,363.64 million) shall be payable in cash and satisfied in the following manner:

Zhongzhi Group is a limited liability company established in the PRC with diversified business operations. It is principally engaged in, among others, asset investment and management, investment and financial advisory businesses, technological development and import and export of commodity and technology and agent services for import and export businesses.

Zhongrong Trust
Zhongrong Trust (formerly known as Harbin International Trust Investment Co., Ltd is a limited liability company established in the PRC.Harbin International Trust Investment Co., Ltd, the predecessor of Zhongrong Trust, was established in 1987.

Jingwei Textile Machinery Company Limited

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