Tapping into fuel oil processing, storage and sales businesses in the PRC
HONG KONG, Dec. 6, 2010 /PRNewswire-Asia/ -- Thinsoft (Holdings) Inc (“The Company” or “Thinsoft”, stock code: 8096.HK), is pleased to announce it acquired the entire stake in Foshan Ruifeng Petroleum for RMB 630 million.
Among the total consideration, approximately RMB 72 million has been paid before signing of the agreement, while RMB 228 million will be paid in cash within one month of the completion of acquisition; RMB 240 million is payable after the completion of the Tranche II CB Placing, and the provision by the vendors of a pro forma combined management accounts of the Ruifeng Group for the 12 months ending 31 December 2010, showing a net profit after tax and extraordinary or exceptional items of not less than RMB 70 million. The remaining RMB 90 million is payable after the completion of the Tranche II CB Placing, and the provision of financial statements of the Ruifeng Goup which have been reviewed by the designated auditor.
Under the agreement, the vendors warrant and guarantee that the actual profit will not be less than the guaranteed profit of RMB 70,000,000. Commenting on the acquisition, Mr. Yu Won- Kong, Dennis, Chairman of ThinSoft (Holdings) Inc, said, “The world economy is posited to enter into another long-term uptrend cycle. The Company considers this is the best time to capture this opportunity to diversify into this new line of business. Demand for oil energy in the mainland, especially in the Southern and Eastern regions, remained robust. Oil energy will still play an important role in China’s total energy supply in the coming years. The acquisition will help the Company diversify the existing business into a new line of business with growth potential, in order to diversify our revenue stream and to enhance shareholder’s value.”
Suifeng and Beili are subsidiaries of the Ruifeng Group, which own oil tanks, a loading terminal and other related facilities in Foshan. The two companies are principally engaged in heavy oil processing and leasing of oil tanks, and will start sales and tradings of fuel oil and other related products in the Southern and Eastern China. Guangdong Province, being the key province of oil consumption in South China, takes up 80% of the total consumption in the region. Oil demand in Guangdong province in 2009 was approximately 10 million tons, while the annual production of oil in Guangdong Province in 2009 is 1,662,910, accounting for 9% of the total production in China, ranking the 4th in the country, representing a huge market potential. Ruifeng Group took up around 26% of local production in the area in 2008, and now strikes to become one of the largest oil refinery corporations in Guangdong area.
