Hu An Cable Holdings, which has been told by SGX to delist, will be filing an appeal, citing a definitive agreement to acquire a majority stake in a new business.
Hu An Cable had on July 1 asked for an extension till July 10 to satisfy listing requirements. It was rejected by SGX.
On July 9, the company entered an agreement to acquire a Singapore incorporated entity, Singapore Orient Power Holding, whose key asset is its 90% stake in a Vietnam-incorporated company New Orient Renewable Energy Company. The agreement was announced on July 10.
For the year between April 2020 and March 2021, the target company generated earnings of $4.3 million on revenue of $5.9 million.
The $57 million acquisition is to be paid in a combination of $8 million in cash and $49 million in new Hu An shares at a price and number to be finalized.
According to Hu An, the target entity has nine employees now and is providing management services to the energy industry.
The remaining 10% is held by one Tran Viet Phuong, and its legal representative, an individual by the name of Li Jun.
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The Vietnam target, as part of the deal with Hu An, will manage and operate a Chinese entity, Guangdong Guangte Electric Co and “exercise control over the business operations and enjoy substantially all the economic rights arising”.
According to Hu An, Guangdong Guangte Electric Co, based in China’s Guangdong province, is in the R&D and production and sale of power transmission and control equipment.
For the year ended Dec 2020, Guangdong Guangte Electric Co reported earnings of RMB707,370 on revenue of RMB268.8 million. As at Dec 31 2020, its order book was RMB179.8 million to be fulfilled over the next six months.
Hu An shares have been suspended since Dec 2018. The company believes that this acquisition of a new business in the energy industry is a “viable” one to acquire.
The company also holds the “preliminary view” that this acquisition will let it keep its listing status on the Singapore Exchange.
