FFWD.L Regulatory News (FFWD)

30 Jun 2006 07:01

London Asia Chinese Private Equity30 June 2006 30 June 2006 London Asia Chinese Private Equity Fund Limited ("LACPEF" or "the Fund") Three new investments LACPEF, the China focused investment fund, announces that it has committed tomake three new investments, for a total consideration of £6.9 million in cash. The Fund is investing £1.9 million in China New Energy Ltd ("CNE"), a leadingturnkey provider of production equipment and technologies for ethanol productionin China; £2.9 million in China Synergy Real Estate Limited ("Synergy"), aleading real estate services firm based in Beijing; and £2.1 million in ChinaBiofoods, a health food products company. China New Energy: CNE's core business is the supply of turnkey technology solutions for theproduction of ethanol, edible alcohol and acetic acid from a range ofbio-resources, including corn, sugarcane, cassava and other bio-resources. CNE has established itself as the leading brand in China, with an estimated 60%share of the market for ethanol production equipment in China. The Company'ssuccessful track record is key to growing the business and its leadingtechnology has been used in over 30 projects. CNE is supported by strong driverswith the demand for ethanol, a fuel seen as an alternative to oil, still growingand supported by a new legislative framework requiring 10% of all vehicle oilconsumption to be biofuel in 11 of China's Provinces. For the year ended 31 December 2005 CNE reported profit after tax of £1.9m(2004: £0.6m) on sales of £8.7m (2004: £3.1m). Based in Guangzhou, it wasfounded in June 2002 as a spin-out from the Renewable Energy division of China'sAcademy of Science, the leading Government funded centre in China for thedevelopment of renewable energy technology. CNE currently has 72 employees and following the investment from the fund, SimonLittlewood and Victor Ng, managers of the Fund, will take a seat on theCompany's board. China Synergy: Synergy is the second largest real estate broker in the northern China market.Founded 10 years ago in Beijing, China, the Company provides agency, consultancyand conveyance services for property developers in China including internationalproperty investors Carlyle Partners and Lehman Bros. The Company focuses ondeals with residential and commercial properties at the top end of the market,and has advised on 60 projects. Synergy was named as "Agency of the Year" in "New Real Estate", the industrymagazine, and in the Top 20 Real Estate Agencies in China" in 2005 by "SINA.com". For the year ended 31 December 2005 Synergy reported profit after tax of £2.1mon turnover of £4.9m, up 58% and 38% respectively on 2004. Simon Littlewoodwill be appointed to the Synergy Board following investment. China Biofoods: China Biofoods is based in Xuchang, Henan Province, the centre for farmingtraditional Chinese medical herbs. It specialises in the production of highlypurified herb extract products which are then used to produce traditionalChinese medicine, and as ingredients in functional foods. The market for "Functional Foods" is expanding rapidly worldwide, especially inChina. "Functional Foods" are foods or dietary components that may provide ahealth benefit beyond their basic nutritional value. China Biofoods' core products are highly purified linolenic acids, Reshimushroom spore oil, and deodorized garlic oil. Linolenic acid, also known asVitamin F, is an essential fatty acid which is not produced by the body, and hasbeen proven to improve hair and skin, reduce blood pressure, help preventarthritis, lower cholesterol & triglycerides and reduce the risk of blood clots. Reshi mushroom spore oil is broadly used in the health food industry as asupplement and intermediate ingredient. In 2005 China Biofoods reported revenues of £2.9m with profit after tax of£1.2m. The Fund will appoint a representative to the China Biofoods Boardfollowing investment. Victor Ng, Director of LACPEF, commented: "All three companies presented atLondon Asia's China Seminar in London earlier this month. There was stronginterest from investors as all three sectors are showing considerable growth onthe back of China's continued economic development. CNE is the leading playerin is field and has significant growth potential as China seeks to developrenewable energy sources and reduce its reliance on expensive imported fossilfuels. Synergy is taking advantage of the switch from public and subsidisedhousing to the development of a private housing market in China, with theBeijing market seeing additional impetus from the 2008 Olympics. ChinaBiofoods' products appeal to the increasingly affluent Chinese population, whohave more money to spend than in the past and are becoming more healthconscious, particularly as a result of the one child policy and the ageing ofthe population" Simon Littlewood, Director of LACPEF, added: "The Fund has now made fiveinvestments, totalling £9.3 million. There is potential to make follow oninvestments in those deals as the companies develop and we also have a number ofother deals which we expect to close in the near future." For further information please visit www.londonasiafunds.com or contact:John West/Matt Ridsdale Simon Littlewood Hugh FieldTavistock Communications London Asia Capital plc Collins Stewart LimitedTel: 020 7920 3150 Tel: 020 7355 7928 Tel: 020 7523 8000 This information is provided by RNS The company news service from the London Stock Exchange