AVIC raises stake in KHD, buy-out offer
China-based AVIC International Holdings Ltd said it will boost its holding in KHD Humboldt Wedag International AG and make a buy-out offer.
The Shenzhen-based company will buy 19 per cent of KHD from 12 sellers for EUR61m (US$83m), increasing its stake to 39.03 per cent, according to a Hong Kong stock exchange filing yesterday. MFC Industrial Ltd. is one of the companies disposing of KHD shares.
In 2010, KHD launched a strategic partnership with CATIC Beijing Co. Ltd, a subsidiary of AVIC. The deal included CATIC acquiring a 20 per cent stake in the German manufacturing company and gave KHD an important entry into the Chinese market.
Buy-out offer
AVIC also said it will join companies owned by Singaporean businessman Yap Lian Seng to make an offer for KHD at EUR6.45/share, or a total consideration of EUR195.5m. Yap will own 58 per cent of KHD and Avic 42 per cent if all holders accept the offer.
Mr Diao, president of AVIC Beijing Company Ltd commented: 'This addresses the unclear ownership picture and is a long-term investment for us. A more stable shareholder base will benefit KHD's worldwide employees, customers, suppliers and financing partners and KHD will continue providing environmental friendly and state-of-the-arts products and services.'
Mr Diao continued: “We expect that the takeover offer will be widely accepted. We would like to emphasise that neither the share purchase agreements, nor the takeover offer, are conditional upon a minimum acceptance level. Upon completion of the takeover offer, we will be pleased if all of the shares of KHD have been acquired. If not we will support KHD as its lead shareholder."
About the AVIC Group
The AVIC Group ranks 212 amongst Fortune Global 500. Its business units cover, amongst others, defense, transport aircraft, engine, helicopter, avionics and systems, general aviation, aviation research, flight test, trade and logistics, assets management, finance services, engineering planning and construction and engineering, procurement and construction, automobile and shipping.
