Sign In
31 Jul 2008 12:55
31 July 2008
LED International Holdings Ltd
("LED International" or "the Company")
Acquisition of Strongbase New Shenzhen Limited ("New Shenzhen")
Highlights
Acquisition of New Shenzhen for RMB 5.5m in cash and shares
New Shenzhen has strong Intellectual property
LED International will now have a presence in premium LED products and markets
Background to the Acquisition
The Board of LED International is pleased to announce that the Company has acquired a 100 per cent stake in New Shenzhen, a specialist in LED and LED related products, accessories and appliances. New Shenzhen has both R&D and manufacturing expertise in relation to LED related products.
New Shenzhen possesses numerous patents and other intellectual property for LED products and LED applications. New Shenzhen was formed in 2006 and is based in Longyang, Shenzhen, People's Republic of China ("PRC") and employs over 40 people. Its product offering includes LED devices, LED displays, LED lightning and LED appliances. It has a strong customer list including GE, Sanyo, Ford Motor and Philips, amongst other leading companies.
The acquisition of New Shenzhen will allow LED International to broaden its product offering to include higher specification products for both its domestic markets and international clients. It will also provide LED International with access to new IP for further product development.
Financial details relating to New Shenzhen
The unaudited accounts for New Shenzhen as at 31 December 2007 recorded a turnover of RMB 10,104,428 (£651,899) and profit after tax of RMB 1,086,839 (£70,119). The shareholders equity recorded on the Balance Sheet was RMB 2,406,410 (£155,252). The exchange rate for the purposes of the above conversion is RMB 15.5 to GBP 1.
For the year to date, New Shenzhen has traded according to management expectations and has continued to develop new patents relating to LED products and appliances.
New Shenzhen will become a wholly owned subsidiary of LED International for the purposes of consolidation for the financial year to 31 December 2008.
Details of the Deal
The consideration for the acquisition will be HK$ 5,500,000 which LED International will satisfy through the payment of HK$ 3.0 million in cash to be paid over 3 years and by the settlement of the balancing HK$ 2.5m in New Ordinary Shares in LED at 1p, a premium to the current mid market share price of 0.875 pence as at 31 July 2008. Therefore, 16,025,000 ordinary shares will be issued to New Shenzhen. These shares will be admitted to trading on AIM on 6 August 2008.
Following the admission to trading of the New Ordinary Shares, LED International will have 194,177,504 ordinary shares in issue resulting in a dilution of 9 per cent to existing shareholders.
Related Party Transaction
This Acquisition constitutes a related party transaction under AIM rules due to the following:
Mr Xiong, Chief Executive for LED International is currently a director of New Shenzhen
Mr Bun Lee, a significant shareholder of LED International, is beneficially the sole shareholder of New Shenzhen.
Zimmerman Adams International, nominated adviser to LED International, is satisfied that the Acquisition is a fair and reasonable transaction insofar as the shareholders are concerned.
Finally, Mr. Zi Dong You, the Vice President of New Shenzhen will be joining LED International as the Chief Technology Officer, a non board position.
Holdings
Mr Bun Lee currently has a beneficial interest of 33,930,866 shares in LED International resulting in an interest of 19.05%. Following the Acquisition and resulting from the issue of 16,025,000 shares with regard to the consideration, Mr Bun Li will have a holding of 49,955,866 (25.75%).
-ends-
Contact:
LED International Holdings Ltd +852 9197 9332
Dennis Ow, Executive Director
www.led-intl.com
Zimmerman Adams International Ltd +44 (0)20 7060 1760
Dominique Doussot/Jonathan Evans
(Nominated Advisers and Brokers)
ICIS Ltd +44 (0)20 7651 8688
Christian Taylor-Wilkinson / Bob Huxford
Follow the stocks
