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Nov. 23, 2011 /PRNewswire-Asia-FirstCall/ -- Hollysys Automation Technologies, Ltd. (NASDAQ: HOLI)
("Hollysys" or the "Company"),a leading provider of automation and control technologies and applications in
China, today announced that it has signed an agreement with China Nuclear Power Engineering Co., Ltd. (CNPEC), a wholly-owned subsidiary of China Guangdong Nuclear Power Holdings Corporation (CGNPC), to sell 10% of its holdings of China Techenergy Co., Ltd. (CTEC) to CNPEC for
RMB 27.8 million.
Pursuant to the terms of stock purchase agreement and associated cooperation agreement, CNPEC is committed to purchase the complete suite of non-safety automation and control products from Hollysys on exclusive basis. This transaction will reduce Hollysys' ownership in CTEC from 50% to 40% and increase CNPEC's ownership from 50% to 60%, which will result in investment income of approximately
RMB 13.0 million for Hollysys.
Changli Wang, Hollysys Chairman and CEO, commented: "We are very pleased to secure our exclusivity supplier status of our nuclear non-safety automation and control products for all the nuclear reactors commissioned by CNPEC. We expect to see our per reactor revenue increased significantly due to expanded nuclear non-safety offerings from previously provided DCS modules to the complete suite of automation and control products in two years, while CTEC will concentrate on its proprietary nuclear safety automation and controls. Given the right opportunities, Hollysys will also be able to further expand its proprietary non-safety automation and control solution market together with CTEC both in Chinese and international market. The divestiture transaction strengthens our cooperation with CGNPC, streamlines business focuses between Hollysys and CTEC, and further enhances leadership and profitability of our nuclear business, which we believe will be value creating for our shareholders."
About China GuangdongNuclear Power Holding Corporation (CGNPC)
China Guangdong Nuclear Power Holding Co., Ltd (CGNPC) is a state-owned nuclear power corporation under Assets Supervision and Administration Commission (SASAC) of the State Council of
China. CGNPC was established in 1994 with nuclear power as its core business. With CGNPC as its core enterprise, China Guangdong Nuclear Power Group (CGNPG) is comprised of more than twenty wholly-owned or controlling subsidiaries. CGNPG holds approximately 60% of
China's nuclear power reactors market share in construction.
About China Nuclear Power Engineering Co., Ltd. (CNPEC)
China Nuclear Power Engineering Co., Ltd. (CNPEC) is one of the main subsidiaries of CGNPG. Founded in 2004, CNPEC is specialized in nuclear power plant engineering construction, management, consulting, project supervision and etc. The projects CNPEC was commissioned to construct include Dayawan, Lingao, Hongyanhe, Ningde Nuclear Power Plants and others.