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| Capturing the Increasing Demand for Healthier Food Products |
HONG KONG, Jan 17, 2011 - (ACN Newswire) - Best Miracle International Limited ("Best Miracle" or the "Company", SEHK: 8272, together with its subsidiaries, the "Group") is pleased to announce that on 29 November 2010, the exercise of the conversion rights attached to the Convertible Bonds issued by Cheong Tat International Development Limited ("Cheong Tat") was approved by the Board. Upon completion of the conversion, the Company will indirectly hold 51% effective interest in Chengde Wugu Farming & Food Co. Ltd. and Chengde Lufeng Farming & Technology Co. Ltd., collectively known as "Grain Farms".
Best Miracle has paid HK$35,154,000 (RMB 30,215,000) for the subscription of the convertible bonds, which represents approximately 85% of the enlarged issued share capital of Cheong Tat. Upon conversion, the Company will also be responsible for providing the capital commitment of HK$ 186,154,000 (RMB 160 million) for the acquisition of 60% interest in Grain Farms via Cheong Tat's wholly-owned PRC entity. The total investment amounts to approximately HK$221,308,000 (RMB 190,215,000). When the conversion is completed, Best Miracle will benefit, pro rata, from an attributable net profit guaranteed to the PRC entity Cheong Tat owned. The amount guaranteed for the year ended 31 December 2010 is RMB 60 million, and for the year ended 31 December 2011 is RMB102 million.
Grain Farms is principally engaged in the production and sales of instant noodle products and instant soup products under the same brand name, "Grain Farms", distributed mainly in northern China to supermarkets and grocery stores. The Conversion gives the Group the opportunity to participate in the fast expanding food industry, in particular, the convenience food industry on the mainland. As at the end of 2009, the Grain Farms companies have annual production capacities of approximately 600 million packs of instant noodles and 60 million packs of instant soup.
With rising urbanization and increased health consciousness of the Chinese population, the health food segment in China is expected to outgrow the food industry as a whole. With their unique non-fried mixed-grain instant noodles and instant soup products, Grain Farms is well positioned to become an industry leader in the healthy convenience food segment. Given the limited number of players in the segment, Best Miracle's engagement in the industry represents significant prospects for the Company. In 2009, China alone has made up almost half of the world's demand for instant noodles, consuming more than 40 billion packs, a market valued at approximately RMB 35 billion. In terms of per capita consumption, the country lagged behind its Asian counterparts such as Korea, Indonesia and Japan, and is expected to grow at a healthy rate.
Best Miracle is principally engaged in brand management and its corporate strategy is to explore investment in industries of high yield potential and growth prospects for diversification.
Commenting on the acquisition, Ms. Chan Lai Kwan Rainbow, CEO of Best Miracle International Limited said, "The Board is most pleased with the opportunity to acquire Grain Farms which is known for its unique mixed grain noodles, and a reputable industry player with valuable assets, healthy operating cash flow and prospects for growth. We are confident that given our brand management expertise, the diversification into the food and beverage industry will yield better long-term returns to our shareholders."
For details of the acquisition, please refer to the company's announcement dated 14 January 2011 filed with the HKEx.
About Chengde Wugu Farming & Food Co. Ltd.
Headquartered in Chengde City, Hebei Province, the PRC, Chengde Wugu Farming & Food Co. Ltd. is principally engaged in the manufacture and sales of instant noodle products. The company specialized in producing non-fried mixed grain instant noodles made from oat and maize, and markets its products under the registered brand "Grain Farms". The "Grain Farms" products are distributed mainly in northern China to supermarkets and grocery stores. As at the end of 2009, Chengde Wugu has 5 production lines with an annual production capacity of approximately 600 million packs.
About Chengde Lufeng Farming & Technology Co. Ltd.
Headquartered in Chengde City, Hebei Province, the PRC, Chengde Lufeng Farming & Technology Co. Ltd. is principally engaged in the production and sales of instant soup, freeze-dried vegetable products and air-dried vegetable products. As at the end of 2009, Chengde Lufeng had an annual capacity of 60 million instant soup packets. It also produced freeze-dried and air-dried vegetable products with a volume of approximately 18,000 tonnes in 2009.
Contact:
Fortune Media Advisory Limited
Ms Joey Lam
Tel: +852 3421 1583
joeylam@fortunemedia.com.hk
Topic: Investment
Source: Best Miracle International Limited
Sectors: Daily Finance, Food & Beverage
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From the Asia Corporate News Network
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