August 14, 2007

Global Bio-chem seeks separate listing for subsidiary

In its August-9 company announcement, Global Bio-chem said it has submitted a formal application to the Hong Kong Stock Exchange on August 2 to spin off and list its subsidiary Global Sweeteners Group (GSG) on the main board of the exchange.

This proposed spin off and separate listing exercise is expected to raise HK$600 million (or HK$690 million if the over-allotment option is exercised in full) and the parent company will book an exceptional gain of HK$310 million for the financial year ending Dec 31, 2007.

Following the implementation of the proposed spin-off and share offer, Global Bio-chem's share in GSG will be reduced from 100 percent to 70 percent initially, and it will be further reduced to 67 percent if the over-allotment option is fully exercised.

GSG will use 25 percent of the estimated net proceeds, or HK$150 million for the construction of new production facilities in Jinzhou. Another HK$270 million, or 45 percent of the estimated net proceeds, will be used in the building of production facilities in Changchun. About HK$147 million will be used to expand production capacities while HK$33 million will be reserved as general working capital.

HK$1.00=US$0.1278 (Aug 14)