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HONG KONG, Feb 28, 2011 - (ACN Newswire) - The Hong Kong Building and Loan Agency Limited ("HK BLDG & LOAN" or the "Company", SEHK:145, together with its subsidiaries, the "Group") is pleased to announce that on 23 February 2011, Wise Planner Limited, a wholly-owned subsidiary of the Company, has entered into the Sale and Purchase Agreement to acquire the entire issued share capital of Weldtech Technology Co. Limited ("Weldtech Technology") at a total consideration of HK$2,800,000,000.
Weldtech Technology is engaged in the development and provision of energy monitoring and energy saving solutions for large scale commercial, industrial and retail buildings as well as institutional blocks such as hospitals. The Company has developed an ultra performance plant control system (the "UPPC system"), a proprietary hardware system integrated with computer software based on five patents which the Weldtech Group owns.
There are a total of six vendors involved in the Sale and Purchase Agreement including leading venture capital New Margin Ventures, the asset management arm of China Construction Bank CCBI International Asset Management (through Season Best), and the window company of China Energy Conservation and Environmental Protection Group in Hong Kong, China Energy Conservation Investment Co., Ltd. (through Carbon Reserve). Upon completion of the acquisition, the Consideration to the six vendors shall be satisfied by a combination of means including cash, issue of convertible notes, promissory notes, together with allotment and issue of consideration shares.
Under the Sales and Purchase Agreement, the Company will benefit from a profit guarantee provided by one of the vendors, SV Technology, underwriting the audited consolidated profit before tax (excluding extraordinary and exceptional items) of the Weldtech Group for the two years ending 31 March 2013 shall not be less than HK$230,000,000.
Designed to optimize the energy efficiency of cooling plants installed in buildings, the UPPC system's integrated solution approach is proven to be superior to other energy saving systems currently available in North America, according to a report published by Berkeley Building Research and Technologies, Inc., a US based independent technical research company.
With a customer base spanning real estate property owners, property management companies and manufacturing conglomerates whose production incurred mass energy consumption, Weldtech Technology operates a flexible business model from an outright sale of the UPPC system to sharing of energy savings or a performance guarantee based on energy management contracts (EMC), an industry practice. Typically, an energy management contract covers a lock-up period varying from five to ten years.
The acquisition gives the Group an invaluable opportunity to participate in the fast expanding energy management industry in China. Driven by government policies to encourage energy savings, Frost and Sullivan, an independent third party, estimated the total market demand for chiller plant optimization to be valued at RMB318 billion in 2009 and is expected to hit a record of approximately RMB1,666 billion by 2021, with a compound annual growth rate of 14.8%.
Furthermore, energy saving sits high on the agenda of China's 12th Five-Year Plan, listed as one of the seven emerging strategic industries driving a market valued at RMB3.4 trillion. According to "Guidance on accelerating development of EMC and energy saving service industries" released in 2010 by the National Development and Reform Commission of the PRC ("NDRC") and the Ministry of Finance, government incentives in the form of subsidies and tax exemption will be granted to energy service companies ("ESCOs"). In November 2010, the Shanghai Energy Management Contract Steering Committee Office has accredited Weldtech Technology's wholly foreign-owned enterprise established in the PRC, as an ESCO.
It has been the overall strategy of the Group to proactively seek investment opportunities that will enhance its financial position. Given the increasing environmental awareness in the country, HK BLDG & LOAN's engagement in the energy saving industry not only represents significant prospects for the Company, but also guarantees a new, recurring and steady income stream. Commenting on the acquisition, Mr. Au Tin Fung, Executive Director of The Hong Kong Building and Loan Agency Limited said, "The Board is most pleased with the opportunity to acquire Weldtech Technology which is known for its proprietary UPPC system, and a reputable industry player with industry expertise, strong research and development ability and prospects for growth. Enabled by the Chinese government's commitment to reduce carbon emission, we are confident that the diversification into the energy management industry will yield long-term returns to our shareholders."
For details of the acquisition, please refer to the company's announcement dated 27 February 2011 filed with the HKEx.
About the Weldtech Group
Weldtech Technology Co. Limited is a company incorporated in Hong Kong. Its wholly foreign-owned enterprise (WOFE) established in the PRC has been accredited by the Shanghai Energy Management Contract Steering Committee Office in November 2010 as an energy service company (ESCO), entitling the WOFE to tax exemption.
Weldtech Technology is principally engaged in the production of a proprietary ultra performance plant control system (the "UPPC system") designed to optimize the energy efficiency of cooling plants installed in buildings. The Company provides energy monitoring and energy saving solutions for large scale commercial, industrial and retail buildings as well as institutional blocks such as hospitals to enhance overall energy efficiency of central air-conditioning system.
Contact:
Fortune Media Advisory Limited
Ms. Joey Lam
Tel: +852 3421 1583
joeylam@fortunemedia.com.hk
Topic: Merger & Acquisition
Source: The Hong Kong Building and Loan Agency Limited
Sectors: Real Estate & REIT
https://www.acnnewswire.com
From the Asia Corporate News Network
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