Ascent Partners successfully provides Valuation Services for a major and connected transaction for China Kangda Food Co. Ltd
On February 27, China Kangda completed a corporate strategic restructuring, disposing of outdated rabbit breeding assets and breeding rabbits themselves.
China Kangda is engaged in the production, processing, sale and distribution of chilled and frozen of processed food products, chilled and frozen rabbit meat, chilled and frozen chicken meat, and other products comprising chicken and rabbit meat by-products and pet food products from the PRC.
Key revenue is generated from the processed food products business.
After a cost comparison between upgrading the existing rabbit breeding assets and associated costs of production and procuring rabbits from other suppliers, the board felt that disposing of the rabbit business assets would be beneficial to the company and shareholders.
As such, Ascent Partners was engaged to provide a comprehensive asset valuation of four breeding assets for a consideration of RMB 73.8 million, subject to auditors’ review.
Proceeds from the disposal of the assets will be used in various business avenues.
Firstly, approximately RMB 17.8 million will be used for the acquisition of chicken breeding assets.
Secondly, approximately RMB 21 million is intended to be used for the improvement of chicken processing productivity in the PRC.
Thirdly, approximately RMB27.9 million is intended to be used to expand the breeding and production facilities of chicken in the PRC.
Finally, approximately RMB7.1 million is allocated to be used as working capital of the Company, and to expand future revenue streams.
Geographically, the company operates in Japan, Europe, the People’s Republic of China, and others. It generates a majority of its revenue from PRC.
The Company is primarily listed on the Hong Kong Stock Exchange (834) and secondarily on the Singapore Stock Exchange (P74).
Once again Ascent Partners Stephen Leung and Wayne Hu’s team has completed a complicated and varied valuation service for one of our long-term clients.