Civil engineering contractor and property developer China Rich Holdings has agreed to acquire a golf resort company 55 per cent owned by its chairman's brother. The transaction, subject to shareholders' approval, would tighten chairman Robert Yip Kwong and his associates' control of China Rich, raising their stake from 37.97 per cent to 40.99 per cent. China Rich, through its wholly owned subsidiary Marvelink, has agreed to buy the entire shares of golf-course builder and operator Tammerworth for $140 million from S. S. Yip and Yeung Pak-wa. It will pay for the acquisition by issuing new China Rich shares equivalent to 17.74 per cent of its enlarged share capital at 40 cents per share, a 23.08 per cent premium to the counter's closing price of 32.5 cents last Friday. As part of the acquisition, China Rich will also assume ownership of shareholders' loans worth $63 million that were due to the vendors. The acquisition was based on a 201 million yuan (about HK$187.6 million) valuation of Tammerworth's properties by surveyor Chesterton Petty. Tammerworth's audited net asset value was $42.15 million on July 31. China Rich executive director Kelly Cheng said Tammerworth was not yet profitable as its mainland golf resort had just started operating. She said the first nine-hole golf course was completed several months ago, while construction of a second nine-hole course is expected to be completed by the middle of next year.
