NewChina Aluminium Cans plans to buy company owned by chairman
Company will buy chairman's related firm for HK$900 million
Aluminium aerosol cans producer China Aluminium Cans plans to buy a company involved in content filling of the cans from its chairman and controlling shareholder for HK$900 million.
China Aluminium Cans said in a stock exchange statement that HK$120 million of the amount will be paid in cash, while the remainder will be covered by the issuance of convertible notes. Chairman Lin Wan-tsang and his associates hold 75 per cent of China Aluminium Cans and the acquisition must be approved by independent shareholders at an extraordinary general meeting. The acquisition target is a holding company with a number of enterprises including Botny Corporation.
China Aluminium Cans, which listed in Hong Kong in July 2013, mainly produces aluminium aerosol cans required for personal care products such as body deodorant. The group of companies that it plans to buy is involved in the downstream business of content filling of aerosol cans and the sale of aerosol and non-aerosol products.
China Aluminium Cans said it had no intension of buying the group when it listed but, after a decline in profits, it saw the acquisition as enabling the company to capture downstream business.
The company’s first-half net profit dropped 44 per cent from a year ago to HK$10.3 million due to fierce competition in the aluminium aerosol cans sector, with many small manufacturers jostling for market share.
The group of companies being acquired reported net profit of HK$60.7 million in 2013, and had total assets of HK$249 million at the end of last year.