Global Sweeteners Approves Acquisition of a Corn Refinery Plant from Global Bio-Chem

The transaction was passed almost unanimously by all the independent shareholders who had cast their votes at the EGM, reflecting shareholders recognition of our strategy to enhance vertical integration.

Oct 18 2011 --- The independent shareholders of Global Sweeteners Holdings Limited approved at an extraordinary general meeting (“EGM”) the acquisition of a corn refinery plant under Global Bio-chem Technology Group Company Limited together with its subsidiaries but excluding Global Sweeteners Group. The resolution was passed with 99.995 per cent of the shares with voting right voted in favour at the EGM.

The acquisition of Changchun Jincheng Corn Development Co., Ltd. (“Changchun Jincheng”) will enable Global Sweeteners to secure and better control its own supply of raw material – corn starch, thereby increasing the Company’s flexibility to adjust its downstream production to meet market changes. Apart from better control its raw material supply, Global Sweeteners will also benefit from greater operational efficiency and strengthened quality control.

“The transaction was passed almost unanimously by all the independent shareholders who had cast their votes at the EGM, reflecting shareholders recognition of our strategy to enhance vertical integration. The acquisition of Changchun Jincheng will enable us to better control our raw material supply and increase our flexibility to ramp up our capacity utilisation and adjust product mix in response to market needs,” said Mr Zhang Fazheng, Chief Executive Officer of Global Sweeteners.
The acquisition of Changchun Jincheng, together with Jinzhou corn refinery’s additional 300,000 metric tonnes per annum (“mtpa”) corn processing capacity expected to be completed by the end of the year, will increase Global Sweeteners’ corn processing capacity from 600,000 mtpa to 1,500,000 mtpa.

Pursuant to the sale and purchase agreement, Global Sweeteners will acquire the entire issued share capital in Changchun Jincheng for a consideration of HK$510,000,000, which will be satisfied upon completion of the acquisition by Global Sweeteners’ allotting and issuing to the Parent Group 377,778,000 new shares (“Consideration Shares”) at an issue price of HK$1.35 per Consideration Share. Upon the issue and allotment of the Consideration Shares, the Parent Group’s shareholding in Global Sweeteners will increase from 52.23 per cent to 64.04 per cent.