Red chip Shanghai Industrial Holdings (SIH) will cap its buying spree of logistics projects by taking a majority stake in China's second-largest domestic air cargo forwarding company, EAS International Transportation.
Shanghai municipal Government's investment flagship yesterday said it would increase its stake in EAS to 60 per cent for a total of 265 million yuan (about HK$248.35 million), giving the state-owned EAS a much-needed capital injection for expansion.
The price of the acquisition is valued at about 15 times earnings before interest, tax, depreciation and amortisation.
SIH has already purchased a 25 per cent stake in EAS and plans to acquire an additional 25 per cent in the next few months. It will acquire the other 10 per cent once regulations banning foreign investors from taking a majority stake in EAS are relaxed.
'In this acquisition, we will hold a majority stake and will be directly involved in the company's management, which is different from our previous acquisitions,' SIH chairman Cai Laixing said.
SIH will appoint two executives to EAS's management. Shanghai Industrial chief executive Donald Lu Mingfang will be EAS' new chairman while Shanghai Industrial deputy chief executive Charles Lu Yuping will become EAS' chief executive.
A 'big name' international investor also will take a stake in EAS in the near future as part of the move to introduce international management skills.