Buyout of minority interests in key subsidiary

HaiKe Chemical Group Ltd

Buyout of minority interests in another key specialty chemical subsidiary 

HaiKe Chemical Group Limited ("HaiKe" or the "Company"), the AIM quoted (AIM: HAIK) petrochemical, specialty chemical and biochemical business based in China, today announces that in line with the strategy to continue to diversify the group business from low margin refining to the downstream chemical area it now owns over 90% of the shares in another key subsidiary.

HaiKe acquired a further 9,455,600 shares in Dongying Hi-Tech Spring Chemical Industry Co., Ltd. ("Hi-Tech Spring") on 22 July 2011. A total cash consideration of RMB30.3m (circa GBP2.9m) was paid for all accumulated beneficial interest of these shares. The acquisition was made via its 88.85%-owned subsidiary Shandong Hi-Tech Chemical Group Ltd. ("Hi-Tech Chemical").

This acquisition, which was made at a 10% discount to Hi-Tech Spring's net assets at end of June 2011, takes HaiKe's ultimate shareholding in Hi-Tech Spring from 53.83% to 91.52%. By increasing its stake in Hi-Tech Spring, HaiKe's net profit would have increased by circa RMB8.0m (circa GBP0.8m) for the first 6 months in 2011.

Mr. Xiaohong Yang, Executive Chairman of HaiKe, commented:

"We have made another significant step forward to further develop the specialty chemical business. The acquisition of Hi-Tech Spring is immediately earnings enhancing and will improve synergies in our petrochemical business. This strategic move increases our exposure in certain specialty chemicals commonly used in vital industries such as agriculture and food. Importantly, Hi-Tech Spring will enhance the Group's profitability and ultimately add value to our shareholders."

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