Saturday, 10 May 2014

China Food Company 06/05/14

As previously announced, the Group signed a sales and
purchase agreement with Wisehand Planning Co. Ltd
(“Wisehand”), a Korean based company, to divest of its
animal feed business for a consideration of US$16 million
in July 2012. However, the transaction did not complete
and the Group is currently considering action against
Wisehand given that Wisehand defaulted on its terms. In
view of the Group’s continued commitment to dispose its
animal feed business, the assets and liabilities pertaining
to animal feed activities have been reclassified to ‘held for
sale’ and the results of discontinued operations presented
separately in the income statement.
By the way ,this is half the original costing for the Feed Business
PwC China is managing the sale of this business and, as previously announced, by mid December PwC had received expressions of interest from seven parties which were commencing the initial due diligence process.  One of these offers was from the feed business' executive team. The Company has considered the credibility of the various parties and the likely timing of an agreement, and has consequently taken the decision to grant exclusivity to the executive management team for a period of one month.  The proposed consideration is at a premium to the net assets of the business which were £3.86 million as at 30 June 2013.
Current MCap of £4.22 , well undervalue at 6p . 10p initial target for the saucy business that will be left behind.

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