CRE plans asset injection to lift blue chip hopes
THE planned 100 per cent injection of food giant Ng Fung Hong into China Resources Enterprise is expected to occur by the end of the year in a transaction to be financed by internal resources and cash-raising.
China Resources Enterprise managing director Frank Ning said group parent China Resources (Holdings) planned to inject Ng Fung in a planned series of moves to dramatically raise China Resources Enterprise earnings over the next five years.
''Our plan is to create a well-developed blue chip company,'' said Mr Ning.
The conglomerate's emphasis will not be on property.
''This will not be the main focus,'' said Mr Ning.
Speaking at the Credit Lyonnais Securities (Asia) Investors' Forum Asia 94 at the Grand Hyatt, Mr Ning said Ng Fung had about a 35 per cent share in Hong Kong's food and basic foods market.
Hong Kong-based company Ng Fung is involved in the distribution and re-export of cereals, oils and food, including fresh vegetables and livestock, from China.
Mr Ning said details relating to the entities that were to be injected into China Resources Enterprise, along with the financing arrangements, had yet to be determined.
He told a press briefing at the Credit Lyonnais conference that the company's intention was to mainly develop income-generating businesses in Hong Kong.
The group policy towards China was to achieve a situation where about 30 per cent of assets of the group, based on the present assets of the group, would be in China over the next two or three years.
The company was interested in taking over or buying mainland state-owned enterprises, he said. Joint ventures would also be considered.
''We think taking over these enterprises is the most efficient way of modernising these enterprises,'' said Mr Ning.
The company has two enterprises in China, engaged in brewing, and compressors and air-conditioners.
The type of enterprise being considered for takeover would need to fit in with overall group strategy, which is to create a fully fledged blue chip conglomerate on the Hong Kong stock exchange.
China Resources (Holdings) took over 51 per cent of Winland Investment in August 1992 in a back-door listing of the property group. Later the parent injected cold storage units into Winland and changed its name to China Resources Enterprise.