Asia Aluminum Holdings has agreed to pay HK$455 million for a 65 per cent stake in a loss-making technology company.
The stake in Prime Hill Technology includes a 28 per cent holding belonging to Asia Aluminum chairman Kwong Wui-chun.
Prime Hill is engaged in developing environmental protection-related technology.
The price will be partly settled by cash payments of HK$188.5 million, and partly by an issue of 94.5 million Asia Aluminum shares at HK$2.82 each, an 8.46 per cent premium to yesterday's closing price of HK$2.60. After the transaction, Mr Kwong's holding in Asia Aluminum, which is planning to change its name to Global Applied Technologies Holdings, will rise to 47 per cent from 46.1 per cent.
The price to be paid for the Prime Hill stake represents a high valuation of HK$700 million for the company, which has been established for less than three years. It had run up a loss of HK$645,519 as of February 29.
Mr Kwong yesterday defended the price, saying Prime Hill would generate a net profit of HK$100 million between March 1 and June 30, 2001, despite its loss-making track record.
