12th Nov 2007 07:09
Albany Capital PLC12 November 2007 12 November 2007 Albany Capital Plc ("Albany Capital") Albany Capital investee company Vestpa Plc acquires Chinese Food Group Albany Capital is pleased to announce that, its investee company, Vestpa Plc ("Vestpa") has today conditionally agreed to acquire the entire issued ordinaryshare capital of Full Fortune Holdings Pte. Limited ("Full Fortune"), a companyincorporated in Singapore. Full Fortune is an investment holding company whosetrading subsidiaries are principally engaged in the manufacture and sale ofbranded food products and has a premium animal feeds business in Weifang Cityand Shou Guang City, in the Shandong province of China. As part of theproposals, Vestpa is, inter alia, effecting a 1 for 40 share consolidation,raising £5 million gross through a subscription of new ordinary shares to fundthe cash element of the consideration payable and changing its name to "ChinaFood Company Plc". A summary of the announcement made by Vestpa today is as follows: "The Board of Vestpa is pleased to announce that it has today conditionallyagreed to acquire the entire issued ordinary share capital of Full FortuneHoldings Pte. Limited ("Full Fortune"), a company incorporated in Singapore.Full Fortune is an investment holding company whose trading subsidiaries areprincipally engaged in the manufacture and sale of branded consumer condimentsproducts and animal feeds in Weifang City and Shou Guang City, in the Shandongprovince of China. Highlights • Full Fortune is the holding company for Fu-Rich, Fuss Feed and FussBiotech. Fu-Rich is the group's consumer foods business which produces a rangeof different types of soya sauce, vinegar and bean paste under its own brandnames from its premises in Weifang City, Shangdong. For the year ended 31December 2006, Full Fortune made a profit before tax of approximately £6.08million on revenue of approximately £19.28 million. • Fu-Rich produces approximately 50 to 60 products under its "Fushi" and"Fushi Hao Tai Tai" brand names from its current factory occupying a totalbuilt-up area of approximately 17,663 sq. m. The Full Fortune Group has land userights over an area of 199,657 sq. m. for new premises in Shou Guang City and anew manufacturing facility for Fu-Rich is currently under construction whichwill increase its production capacity by 50 per cent. from 100,000 to 150,000tonnes per annum. • Fu-Rich operates in one of the fastest growing segments within thePRC's food industry reflecting the increasing purchasing power of Chineseconsumers. Annual sales for this market segment are estimated to have grown fromRMB59 billion in 2004 to RMB100 billion in 2006 (approximately £6.4 billion atthe current exchange rate). • Fu-Rich's primary market is Weifang but it also sells to other citiesin Shandong, as well as to neighbouring provinces including Henan, Jiangsu,Anhui, Hebei, Tianjin, Beijing and Liaoning. Fu-Rich is believed to hold aleading market position in Weifang and a significant share of the wider Shandongmarketplace. For the year to 31 December 2006, sales to provinces outside ofShandong accounted for approximately 16.9 per cent. of Fu-Rich's total revenues. • Fu-Rich sells its products via a network of 205 distributors,retailers and numerous outlets of large and medium sized supermarket chains inten provinces and municipal cities in the north-eastern region of the PRC,including Wal Mart, Carrefour, Shiji Lianhua and Jialejia. • Fuss Feed was founded in November 1994. Initially focused on themanufacture of Compound Feed for poultry, cows and pigs; it has sincediversified to manufacture higher-margin Premix and Concentrate Feed, operatingtwo production lines at a 15,000 sq. m. plant in Shou Guang City, Shangdong. • In 2004, Fuss Feed embarked on a deliberate strategy to expand intothe neighbouring provinces around Shandong, with the selective appointment ofpreferred distributors. As at 30 June 2007, it had a total of 13 distributorslocated in Henan, Anhui, Jiangsu and Hebei and the New Board believes that thereis significant potential to grow revenues from these territories now that theFull Fortune Group has an established foothold. Summary financial information on the Full Fortune Group Year ended Year ended Year ended 31 December 2004 31 December 2005 31 December 2006 £000s £000s £000s Revenue 8,978 13,870 19,273Gross profit 3,077 4,314 6,771Gross margin (per cent.) 34.27 31.10 35.13EBITDA 2,988 4,172 6,454Profit before taxation 2,619 3,834 6,077Profit after taxation 1,971 2,838 4,437Net margin (per cent.) 21.95 20.46 23.02Cash and cash equivalents 2,337 3,799 3,656Net assets 4,820 6,997 10,545 • Proposed board of Vestpa from Completion to consist of members of theFull Fortune Group's existing senior management including Raphael Tham (CEO),Feng Bo (COO) and Frank Chau (CFO), alongside John McLean, the existingExecutive Director of Vestpa who will become Non-Executive Chairman and DerekMarsh, CVO, as a new Non-Executive Director. On Completion, James Cane andThomas Vaughan are to step down from the board. • The consideration payable in respect of the Acquisition is to besatisfied through the issue of 40,333,333 New Ordinary Shares at the Issue Priceand a cash payment of £5 million. The consideration values all of the issuedFull Fortune share capital at approximately £25.17 million based on the IssuePrice and approximately £35.25 million based on the closing middle market priceof 75 pence (as adjusted for the Share Consolidation) per New Ordinary Share asderived from the AIM Appendix to the Daily Official List on the business dayimmediately prior to the date of this announcement. • Share Consolidation comprising one New Ordinary Share of 4 pence eachfor every 40 Existing Ordinary Shares of 0.1 pence each. • Subscriptions to raise £5 million gross (approximately £4.1 millionafter expenses) through the issue of 16,666,667 Subscription Shares at 30 penceper share. The Subscription Shares will be issued fully paid and will, inaggregate, represent approximately 25.33 per cent. of the Enlarged ShareCapital. • In view of the size and nature of the Acquisition, it constitutes areverse takeover of the Company under the AIM Rules and therefore requires theprior approval of Shareholders at a General Meeting. • Following shareholder approval, Vestpa will change its name to "ChinaFood Company Plc". • Strand Partners is acting as Financial and Nominated Adviser andBroker in connection with the Proposals." John McLean, Chairman of Albany Capital Plc, commented: "In the China Food Company Albany will have an investment in a well establishedcompany that has produced strong growth in revenues and profits. The businessis highly cash generative and comes to AIM with little debt and good growthprospects. The company has a very strong management team which is ambitious togrow the company's commercial base and deliver growth to shareholders throughits London listing on AIM." To facilitate the transaction, Albany Capital has undertaken to subscribe for7,178,342 new ordinary shares of 4p each in Vestpa under the Subscriptions at aprice of 30p per share and has further undertaken to subscribe for the balanceof 9,488,325 subscription shares, subject to clawback to satisfy applicationsfrom other Vestpa shareholders and certain new investors. Existing shareholdersin Vestpa are being offered the opportunity to subscribe for in aggregate4,954,965 new ordinary shares in the Subscriptions in proportion to theirrespective shareholdings in the company. Accordingly, following completion ofthe transaction and the Subscriptions, Albany Capital expects to be interestedin a minimum of 19.05 per cent., subject to a maximum of 33.34 per cent. ofVestpa's enlarged issued share capital if it is required to subscribe for itsfull allocation pursuant to the underwriting arrangements. Enquiries:Albany Capita PlcJohn McLean, Chairman Tel: +44 (0)20 3178 4506 WH Ireland LimitedJames Joyce Tel: +44 (0) 20 7220 1666David Porter Hansard GroupAdam Reynolds Tel: +44 (0) 20 7245 1100John Bick This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
ALB.L