(25-04-2014, 07:01 PM)desmondxyz Wrote: http://infopub.sgx.com/FileOpen/KingWanC...eID=293446
24 mils profit from the completion of SPA. Is this the profit gain from the divestment or profit sharing over the period waiting for KTIS ipo?
SGX Mainboard-Listed King Wan Acquires 20% Of Environmentally Friendly Thai Pulp Company EPPCO In Share Swap For S$9.8 Million
◦Strategic stake will allow King Wan to develop a new business in addition to its core mechanical & engineering services and diversify Group's revenue stream
◦EPPCO will gain 23.64% stake in King Wan which will issue 76.88 million new shares to be priced at 12.8 cents a share
Singapore, 20 October 2004 - Singapore Exchange Mainboard-listed King Wan Corporation Limited ("King Wan") announced today that it would acquire a strategic 20% stake worth S$9.84 million in Environment Pulp and Paper Company Limited ("EPPCO"), a company incorporated in Thailand, through a share swap deal.
EPPCO, which will commence operations in November 2004, is principally engaged in the production and sale of chemically bleached pulp derived from sugar cane bagasse, a by-product derived from the process in which cane sugar is extracted from sugar cane using the Elemental Chlorine-free ("ECF") environmentally friendly production process. The plant has the capacity to produce 75,000 metric tons of dry bagasse pulp and 25,000 tones of wet bagasse pulp annually.
Under the terms of the transaction pending shareholders and regulatory approval, King Wan will issue 76.88 million new shares of 10.0 Singapore cents par value each to a shareholder of EPPCO as aggregate consideration (based on S$4.10 for each Sale Share). This will constitute 23.64% of the enlarged share capital of King Wan, which will be increased from 248 million shares currently to 325 million shares after the share swap exercise.
In turn, King Wan will receive 2.4 million shares of Baht 100 each in EPPCO, representing a 20% stake worth Baht 240 million (S$9.8 million). Assuming the deal is completed by November 2004, King Wan will be able to equity-account for the results of EPPCO in the Group's consolidated accounts from the financial year ending 31 March 2005.
Following the transaction, EPPCO will become an associated company of King Wan thus helping it to develop a new pulp-related business in addition to its current core business of mechanical and electrical ("M&E") engineering services.
EPPCO's new plant is strategically located in the Nongpho district of Nakhonsawan province (approximately 200 kilometres from Bangkok), which is the sugar heartland of Thailand. The primary customer base will be the domestic market as well as export to countries such as Japan and Taiwan. The company has also been granted promotion privileges from Thailand's Board of Investment ("BOI") where it will enjoy tax exemption benefits for 8 years from the date of first income and reduced income tax rate for the next 2 years. It will also have the privilege to remit foreign exchange out of Thailand.
Commenting on the acquisition, King Wan's Managing Director, Ms Chua Eng Eng said: "The share swap will allow King Wan to take a strategic stake in a new resource-based industry with vast potential. Demand for pulp is growing in tandem with the increasing global demand for paper and paper products. However, many companies have started to demand for environmentally friendly products from their suppliers and countries such as Japan and Taiwan are placing similar emphasis, which will augur well for EPPCO. Pulp derived from bagasse also possesses desirable qualities that will give paper products qualities such as texture, colour and opacity, hence the demand and market price for this commodity have been steadily increasing in the last few years."
"EPPCO has the unique advantage of having access to Thailand's readily available and relatively cheap raw materials and will thus be able to leverage on Thailand's growing paper industry. Coupled with generous tax incentives over the next ten years, we are confident in EPPCO's sustainable bright prospects. EPPCO, in turn, will be able to access capital markets more easily by being part of King Wan which is listed on the Mainboard of the Singapore Exchange," added Ms Chua.
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