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HONG KONG, Jan 11, 2010 - (ACN Newswire) - ASIA ENERGY LOGISTICS GROUP LIMITED ("Asia Energy Log" or the "Company", stock code: 351, together with its subsidiaries, the "Group") announced it will acquire the entire equity interest of a BVI incorporated investment holding company OCEAN JADE INVESTMENTS LIMITED (the "Target"). The Target has entered into a 50:50 joint venture agreement (the "JV Agreement") with a Hong Kong company, Waibert Navigation Company Limited ("Waibert"), to form a new company (the "JV Company") focusing on vessels ownership and provide coal shipment logistics services for contract of affreightment ("COA") providers either domestically within the PRC or globally. Ocean Jade is wholly owned by ZHU Gong Shan, a director of a subsidiary of the Group and chairman and executive director of GCL-Poly Energy Holdings Limited.
The Sales & Purchase Agreement
The S&P Agreement between the Group (the "Purchaser") and the Vendor, which holds the entire issued share capital ("Sale Share") of Ocean Jade, was established on 18 December 2009, formalizing the intended acquisition of the Sale Share. It will be satisfied by a Consideration of HK$160 million by means of the Purchaser procuring to issue to the Vendor 1,000,000,000 Consideration Shares of the Company at HK$0.16 each, with a lock-up period of 12 months. In addition, the Vendor has undertaken and guaranteed to the Purchaser an after tax net profit of not less than HK$20 million, attributable to the shareholders of Ocean Jade for the first full year after the commercial operation of the acquired vessels.
The Consideration Shares represent approximately 9.75% of the existing issued share capital of the Company and approximately 8.88% of the issued share capital of the Company as enlarged by the Consideration Shares. The price of HK$0.16 per Consideration Share represents a discount of approximately 11.6% to the closing price of HK$0.181 per share as quoted on the Stock Exchange on the last trading day.
Subject to the fulfillment of all the conditions stipulated under the S&P Agreement including but not limiting to the approval by the shareholders of the Company, Ocean Jade will become a wholly owned subsidiary of Asia Energy Logistics Group Limited. The S&P Agreement will automatically terminate after 180 days upon signing of the agreement and both the Purchaser and the Vendor shall retain no claim against each other, if the conditions of the sales and purchase are not fully satisfied.
The Joint Venture Agreement and the Joint Venture Company
The newly formed JV Company intends to acquire two Handy-size vessels (about 30,000 metric tonnes in deadweight per vessel) and two Panamax vessels (about 76,000 metric tonnes in deadweight per vessel) at a prevailing market price in the region of US$114 million (approximately HK$889.2 million) in total value. Acquisition of the vessels is expected to be completed within a period of nine months from 1 December, 2009, the date the JV Agreement was signed.
The JV Company will focus on three major areas of businesses:
1. investment in vessel ownership,
2. provide coal shipment transport services for COA providers either domestically within the PRC or globally, and
3. other businesses such as investment in the management and/or operation of terminals, and/or logistics operations as deemed fit by the JV shareholders.
Commenting on the transaction, LIANG Jun, chairman of Asia Energy Logistics Group Limited said, "The acquisition of Ocean Jade represents a significant move by the Company to diversify beyond the waste incineration and power generation business in China. The JV Company to be formed will leverage the escalating demand in China's dry bulk shipping industry as the country saw a steady demand in steel and coal consumption induced by the government's efforts to stimulate the economy. The investment is in line with the Group's strategy to further our position in the field of logistics and infrastructure projects on the mainland."
About OCEAN JADE INVESTMENTS LIMITED
Ocean Jade is an investment holding company incorporated in the BVI with limited liability. It is wholly owned by ZHU Gong Shan, a director of a subsidiary of Asia Energy Logistics Group Limited and chairman and executive director of GCL-Poly Energy Holdings Limited. Ocean Jade owns 50% of the issued share capital of a JV Company formed in partnership with Waibert.
Contact:
Fortune Media Advisory Limited
Ms Josephine Lau
Tel: +852 3421 0981/ 9455 8275
jolau@fortunemedia.com.hk
Ms Joey Lam
Tel: +852 3421 1583/ 9313 9196
joeylam@fortunemedia.com.hk
Topic: Merger & Acquisition
Source: Asia Energy Logistics
Sectors: Logistics & Supply Chain, Energy, Alternatives
https://www.acnnewswire.com
From the Asia Corporate News Network
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