Xiangyu Dredging Holdings Limited is pleased to announce the Company and its subsidiaries (the “Group”) will acquireequity interest in Jiangsu Jiaolong Salvage Harbour Engineering Co. Ltd(“Jiangsu Jiaolong Salvage”) on 19 September 2011. The Group will purchase an aggregate of 11% equity interest (before enlargement of registered capital pursuant to the subscription agreement) in Jiangsu Jiaolong Salvage at a purchase price of RMB27.5 million and subscribe for new equity capital in Jiangsu Jiaolong Salvage with a face value of RMB32,698,776 at thesubscription price of RMB100 million. Immediately after the completion of the above, the Groupwill be interested in 51% of the enlarged registered capital of Jiangsu Jiaolong Salvage. Jiangsu Jiaolong Salvage is principally engaged in thebusiness of salvaging sunk objects and contractor of provision of engineering services for ports andchannels. It’s certified with Class I salvaging qualifications for inland rivers andClass II salvaging qualifications for coastal watersawarded by the Diving and SalvagingManagement Committee of the Ministry of Communicationsand ClassII sub-contractor engineering qualifications for port and waterways by Construction Engineering Administration of Jiangsu Province. It was also recognized as one of the leading enterprises among domestic peers (excluding national professional salvage teams)in China by ChinaDiving and Salvage Industry Association (中國潛水打撈行業協會). Jiangsu Jiaolong Salvage‘s original equity-holders have agreed to give certain profit guarantees in favour of the Group and, in the meanwhile, the Group shall share 55% of the profits of Jiangsu Jiaolong Salvage up to 31 December 2014. JangsuJiaolong Salvage’s original equity-holders and the Group also agreed to provide shareholders’ loans to Jiangsu Jiaolong Salvage according to their respective equity holdings (after completion of the subscription) as working capital for the construction of a self-propelled floating crane-craft (起重船) under ‘‘2000T’’ specification. Mr. Liu Kaijin, Chief Executive Officer of Xiangyu Dredging, commented, “The acquisition would not only enable the Group to create synergy to our existing business, but also broadening the Group’s income stream as well as customers stream.We believe that the acquisition will benefit us in creating the best return for our shareholders.” |