25th Feb 2014 12:28
LONDON (Alliance News) - China New Energy Ltd Tuesday said that, following due diligence findings, it will not be moving further with the acquisition of BAPP Ethanol Holdings Ltd.
The engineering and technology company for the bioenergy sector entered a memorandum of understanding to acquire BAPP Ethanol, a wholly owned subsidiary of Sino Distillery Group Ltd in December last year.
At the time, China New Energy said that following certain restructuring, BAPP will have an indirect 75% interest in Harbin China Distillery Company Ltd, an owner and operator of a 60,000 tonne per annum bio-refinery near Harbin in North East China.
The cost of the deal was expected to be roughly GBP15 million and China New Energy said that if completed, the acquisition would help the company become an operating company and provide a showcase for the company's energy efficiency technology and second generation cellulosic biofuel production technology.
As a result of issues with due diligence findings, the company has requested that trading in its shares is resumed and the suspension from trading in the company's shares has now been lifted.
"We are very disappointed that discussions have had to terminate, however, findings from the legal and financial due diligence suggested that the transaction was not as first envisaged and would have required the company raising significant funds," Executive Chairman Yu Weijun said in a statement.
China New Energy shares were up 2.3% to 4.50 pence Tuesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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