MARKET DEVELOPMENT
China-Based Henan Xinghe Plans To Introduce Oil Products In Malaysia
China-Based Henan Xinghe Plans To Introduce Oil Products In Malaysia
26/03/2014 (Bernama) - China edible oil producer, Henan Xinghe Oil and Fat Co Ltd, plans to introduce its branded oil products to Malaysia in the wake of a proposed reverse takeover (RTO) of Key West Global Telecommunications Bhd.
The move will mark the first foray of the company, one of China's top six edible oil makers, out of its home turf, said Director, Ma Guoliang.
"Malaysia has a strong demand for peanut oil and we are upbeat on the prospects here," said Ma after attending Key West's extraordinary general meeting (EGM) here Wednesday.
Key West's shareholders approved the reverse takeover proposal by Henan Xinghe at the EGM.
Under the RTO, Key West will issue 1.9 billion new shares at 11 sen each to raise a total of RM210 million for the China company, which in turn will shift its edible oil business to Key West.
The deal will see Henan Xinghe providing a profit guarantee of 135 million yuan (RM67 million) to Key West for each of the three financial years ending 2013, 2014 and 2015, said Key West in a statement.
The RTO is expected to complete by April, after which Key West's name will be changed to "Xinghe Holdings Bhd", the statement said.
Key West in 2011 divested its loss-making telecommunications business and turned to the oil and gas business in the hope of turning around the company but the move fell through.
Henan Xinghe Oil and Fat is 91.15 per cent owned by Supreme Global Group Ltd, a China government-linked company, which is majority controlled by Testa Holdings Bhd.
Henan Xinghe positions its "Xinghe" branded oil in China as a premium brand but price them marginally lower than its rivals.
Its oil products are available in eight provinces and cities such as Henan, Beijing, Shandong and Hebei, he said.
The Chinese company also plans to set up a plant in Malaysia to process palm oil for exports back to China, he said, refusing to give a timeline.
"China is in demand of eight million tonnes of palm oil every year and we can tap Malaysia's abundant resources of palm oil.
"We are still familiarising ourselves with the market in Malaysia and our expansion plans will be carried out in phases after the takeover," he added.
The move will mark the first foray of the company, one of China's top six edible oil makers, out of its home turf, said Director, Ma Guoliang.
"Malaysia has a strong demand for peanut oil and we are upbeat on the prospects here," said Ma after attending Key West's extraordinary general meeting (EGM) here Wednesday.
Key West's shareholders approved the reverse takeover proposal by Henan Xinghe at the EGM.
Under the RTO, Key West will issue 1.9 billion new shares at 11 sen each to raise a total of RM210 million for the China company, which in turn will shift its edible oil business to Key West.
The deal will see Henan Xinghe providing a profit guarantee of 135 million yuan (RM67 million) to Key West for each of the three financial years ending 2013, 2014 and 2015, said Key West in a statement.
The RTO is expected to complete by April, after which Key West's name will be changed to "Xinghe Holdings Bhd", the statement said.
Key West in 2011 divested its loss-making telecommunications business and turned to the oil and gas business in the hope of turning around the company but the move fell through.
Henan Xinghe Oil and Fat is 91.15 per cent owned by Supreme Global Group Ltd, a China government-linked company, which is majority controlled by Testa Holdings Bhd.
Henan Xinghe positions its "Xinghe" branded oil in China as a premium brand but price them marginally lower than its rivals.
Its oil products are available in eight provinces and cities such as Henan, Beijing, Shandong and Hebei, he said.
The Chinese company also plans to set up a plant in Malaysia to process palm oil for exports back to China, he said, refusing to give a timeline.
"China is in demand of eight million tonnes of palm oil every year and we can tap Malaysia's abundant resources of palm oil.
"We are still familiarising ourselves with the market in Malaysia and our expansion plans will be carried out in phases after the takeover," he added.