Shanghai: Singapore-listed JES International Holdings, a private shipbuilding group based in China, announced that the group has entered into a framework agreement to acquire 51% of the entire issued and paid-up capital of SCIBOIS for a consideration of up to $65m.
SCIBOIS owns a 75% stake in De Commerce Internationale Du Bois Au Congo SCIBOIS Spral (STE), a forestry company engaged in the Congo with a forest harvesting license until May 2036, for a forest area of approximately 229,400 hectares. The value of this forest area is estimated at more than $3bn.
JES said it targets to tap into potential debt capital markets for raising significant amount of funds in order to develop in both the shipbuilding and forestry business.
JES reported a net loss of RMB522m for the fiscal year of 2013. It has secured banking facilities amounting to RMB135m from various financial institutions. According to its auditor firm BDO, the group is also in the process of securing an equity line facility from another investor of RMB217m. JES said in a release that while it is aware of its current financial position, the group has not encountered difficulties in continuing to utilise its existing banking facilities.
“The Group believes that this acquisition is an excellent opportunity to diversify our cyclical shipbuilding business. The target already has a forest harvesting license for a sizeable forest area. With fresh funding the operations can be scaled up significantly to realise the full potential of this venture. We strongly believe that this acquisition will strengthen the Group’s earnings profile and help to create shareholders’ value,” commented Jin Xin, chairman and ceo of JES. [09/04/14]