July 4, 2007

China Agri-Industries will not buy parent's assets for now
 

China Agri-Industries Holdings Ltd., a Chinese crop processor and bio-fuel producer, said it does not plan to exercise its options to buy assets from its parent from now until April next year.

In May, China Agri-Industries said it gained the right to buy 20.74 percent of Shenzhen-listed biochemical fuel processor Anhui BBCA Biochemical Co. from its parent, Cofco Ltd. The option took effect Apr 3.

China Agri-Industries also gained the right to buy any interest or business in Xinjiang Tayuan Safflower Co. from its parent effective Apr 10. Cofco holds an indirect 49.08 percent stake in Xinjiang Tayuan, which extracts edible safflower oil.

While it has decided not to exercise the options from now until April next year, China Agri-Industries said in a statement late Tuesday (Jul 3) it may still exercise the options in future.

The company said it held off buying Anhui BBCA shares because Anhui BBCA recorded "a considerable loss" for the year ending 2006, and it has not restructured its business to fit China Agri-Industries' core operations. The statement did not give a figure for Anhui BBCA's 2006 loss.

It said it also decided not to exercise its right to buy any interest in Xinjiang Tayuan, because demand for safflower oil has not taken off.

Due to a downturn in the high-end market for edible safflower oil, Xinjiang Tayuan has not been producing the oil since end-2005, China Agri-Industries said.