Jan. 8, 2013 /CNW/ - Asia Bio-Chem Group Corp. (TSX: ABC) ("Asia Bio-Chem" or the "Company") is pleased to announce that it has successfully completed the acquisition of all the issued and outstanding shares of Tieling Wanshunda Starch Company Ltd. ("Tieling") a wholly foreign owned enterprise ("WFOE") under the laws of the PRC (The "Acquisition").
"The acquisition of Tieling represents an opportunity to grow the company's annual corn processing capacity from current 0.9 million tons to 1.5 million tons at an extremely attractive price" stated Mr.
Zhiping Wang, President and CEO of
Under the terms of the Acquisition (available on SEDAR), the purchase price of Chinese Yuan (CNY) 280 million (Canadian
$44.8 million) will be satisfied as follows:
- CNY 250 million ( $40 million) in the form of account receivables of Asia Bio-Chem, and
- CNY 30 million ( $4.8 million) note payable 12 months after the completion of all title changes and filing approval with the local government.
The accounts receivable which
will transfer represent amounts due over one year.
Completion of the Acquisition is subject to terms and conditions as specified in the acquisition agreement which will be filed on SEDAR.
About Tieling Wanshunda Starch Company Ltd.
The sole operations of Tieling is a corn processing plant in Tieling City of Liaoning Province in the PRC. As part of this plant, Tieling owns a land lease for a 98,881 M
parcel of land with a remaining term of 46 years, a 65,200 M
manufacturing and office buildings, a power facility and modern equipment relating to a complete corn starch processing plant. The Tieling plant was constructed in early 1990s and upgraded in 2007 and includes up to date and fully functional equipment which employs the same process and technology as employed at our updated Changtu facility. The plant has an estimated capacity of 600,000 tonnes of corn per annual.
Tieling owns a license, issued by the NDRC, to construct and operate a plant to produce 420,000 tonnes of starch and 350,000 tons of corn sweeteners per year. The sweetener plant was never built and the plant had been producing only corn starch, germ, gluten and fiber.