29th Apr 2014 11:20
LONDON (Alliance News) - HaiKe Chemical Group Limited said Tuesday that certain Group companies have entered into two conditional sale and purchase agreements to dispose of unprofitable assets as the firm continues to restructure its interests.
The petrochemical, specialty chemical and biochemical business based in Shandong Province of China, said the principle aim of the sale and purchase agreements is to effect the divestment of the group's "historically unprofitable assets" and a significant proportion of the group's financial liabilities.
Upon completion of these deals, HaiKe will dispose of its refinery assets, the large majority of the group's debts, as well as its biochemical assets, in order to leave a smaller but more focused specialty chemical business.
In December the company said that it was exploring restructuring options after reporting another mixed performance in the second-half of the year, with revenues up but its loss widening significantly. The firm said Tuesday that the feasibility of restructuring has now been completed, with the disposals deemed to be in the best interests of shareholders.
In a trading update at the end of 2013, the company said revenues had risen 140% to CNY36.8 billion in the first 11 months of its financial year, but its net loss had still widened to CNY359.8 million from a loss of CNY186.9 million in the same period of 2012. Its net borrowings had risen to CNY7.4 billion by the end of November, compared with CNY6.2 billion at the start of 2013.
Shares in HaiKe were Tuesday trading 28.57% higher at 27 pence per share, the second biggest gainer on the AIM All-Share market.
By Alice Attwood; [email protected]; @AliceAtAlliance
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