A Memorandum of Understanding (MOU) has been signed by the C&G Industrial Holdings Limited to give effect to sale of its PET chips and yarn production business for between US $49-58 million.
Shortly, the business which at present is owned by C&G's subsidiary, CHGU Group Technology Holdings International Ltd (CHGU), will be acquired by Mr Hou Shiqing, who is a major shareholder in Gangyi Dyeing Manufacture Co., Ltd., a Shishi City textile group.
The ultimate sale price is to be worked out by both the parties through negotiations, after considering CGHU's economical conditions along with its business prospects.
The MOU will be in effect only for a duration of six months and will lapse and become ineffective thereafter, and thus, Mr. Hou who is carrying out due diligence on the group is required to effect to the final sale and purchase agreement, within this time period.
As it is a pre-requisite, a general meeting of shareholders is to be convened to obtain their permission prior to giving final form to the proposed sale. Also permission needs to be obtained from SGX-ST and other concerned regulatory authorities.
According to C&G Group Chief Executive, Cai Junyi, the textile industry has become more competitive and the group would have to make heavy and substantial investments to stay ahead.