HaiKe increases stake in key refinery

HaiKe Chemical Group Ltd

HaiKe increases stake in key refinery 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 order to further enhance its profitability, HaiKe will increase its stake in a profitable refinery subsidiary by 22.2% to 65.7%.

Hi-Tech Chemical Group Ltd, the Company's 88.85%-owned subsidiary, entered into a share purchase agreement with Xindu Group Company Ltd on 14 November 2011 to acquire 100,000,000 shares in Dongying Hi-Tech Ruilin Chemical Co., Ltd. ("Hi-Tech Ruilin") representing 25% of the Hi-Tech Ruilin shares in issue for a total cash consideration of RMB114m (circa GBP11m). Following the acquisition, Hi-Tech Chemical's shareholding in Hi-Tech Ruilin will increase from 49% to 74%. HaiKe's interest in Hi-Tech Ruilin will increase from 43.5% to 65.7%. This acquisition will be completed by 30 November 2011.

Had the acquisition been effective from 1 January 2011, HaiKe's attributable net profit for the first 10 months in 2011, after deducting minority interest would have increased by circa RMB11.1m (circa GBP1.1m), based on unaudited management accounts. For the full year ended 31 December 2010 Hi-Tech Ruilin made a loss of RMB 110 million.

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

"We are focused on improving our profitability and enhancing shareholder value. The acquisition of Hi-Tech Ruilin is another major earnings enhancing step and will improve intra-group synergies with our specialty business. Hi-Tech Ruilin performed well in the first 10 months of this year and we believe it will continue to enhance our overall performance in the future."

Further enquiries