Updates

SINGAPORE: Singapore-listed Jade Technologies says it plans to buy a 20 per cent indirect stake in Chinese company Xin Long Chemical for S$7.8 million.

Xin Long's main business activities are in the manufacturing and trading of titanium dioxide-related products.

Jade says the acquisition will allow it to gain a steady stream of revenue and profit.

It says this will also diversify its business profile and reduce its reliance on coal-mining.

The transaction will be effected through a restructuring plan where Jade takes an indirect stake in Xin Long through a joint venture with Xin Long's owners.

Jade will fund the acquisition by issuing 565 million new shares at one cent each.

It will also issue S$2.2 million worth of corporate bonds to the vendors.

The vendors have indicated that Xin Long should have a net profit after tax of at least 40 million yuan or S$9 million for the 2008 financial year.

Jade says it has the right to abort the transaction if the 2008 net profits come in lower than 28 million yuan or S$6.3 million.