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2007-11-23 07:36:00 p.m. HKT, XFNA
Hong Kong-listed Hualing Holdings to buy Welling Hldg from Midea for 4.5 bln
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hkd
HONG KONG (XFN-ASIA) - Hualing Holdings Ltd said it has agreed to acquire
100 pct of Welling Holding Ltd for a total of 4.5 bln hkd from major
shareholder Midea Group.
Welling Holding manufactures and distributes motors for electrical
household appliances, including air-conditioners and washing machines, as
well as electrical transformers and resistors under the ""Welling"" brand name.
The deal will be satisfied by the issue of 8.753 bln shares at 0.414 hkd
per share to Midea, Hualing's net receivables of 876 mln hkd and the sale of
the ""Hualing"" brand for 1 hkd.
The share issue price represents a 41.69 pct discount to the last trading
price of 0.71 hkd.
""Hualing"" brand companies make and sell electrical household appliances
such as air-conditioners, refrigerators and mini refrigerators to Welling
Electric.
After the transaction, Midea Group's shareholdings in Hualing will rise
to 74.9 pct from 28.6 pct.
Hualing also proposed to change its company name to Welling Holding Ltd
after the transaction. Trading of shares will resume on Monday.
Hualing said it has recorded a net loss for the past five years to
end-2006 and its brand is perceived by the market as a second-tier brand of
electrical household appliances. It added that it also caters to an
increasingly narrow and competitive market.
The company said it was very difficult for it to be able to compete
favorably against stronger and more dominant brands.
However, Hualing added that the asset it is buying from Midea has greater
potential.
roby.lau@xfn.com
rl/kmq xfnrl/xfnkm
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