New Oasis’ contracts on hand for distribution and installation of flooring and wood products to large scale property developers totaled RMB120mn.
Sustainable Forest Holdings Limited (“SFH”) announced that the acquisition of Susfor-Oasis Company Limited (“New Oasis”) was completed on 2 August 2011. Accordingly, the First Tranche Consideration Shares and the Second Tranche Consideration Shares have been issued by the Group to Mr Li Zhixiong (“the Vendor”) on the same day.
Prior to the completion of the acquisition, SFH has announced in March an Acquisition Agreement with the Vendor for acquiring the entire issued share capital of Originate Tech (now New Oasis), at a consideration up to HK$380,000,000, by way of allotment and issue of a maximum of 769,230,769 new SFH shares, in three tranches to the Vendor at the issue price of HK$0.494 per share. The first tranche comprising 100,000,000 Consideration Shares was issued at completion; the second tranche comprising 280,000,000 Consideration Shares was also issued by the Group at completion but kept by the escrow agent1 upon fulfillment of the Profit Guarantee2.
New Oasis focuses on three primary business areas covering wholesale, commercial and retail markets in China, including the operation of wholesale timber exchange in Zhongshan, distribution and installation of flooring and other wood products directly to large scale property developers in Southern China and selling of flooring products through a franchise network. The acquisition enables the Group to access a new clientele and expand its distribution network in China by leveraging New Oasis’ excellent reputation and established brand name.
Mr Li Zhixiong, President of Susfor-Oasis Company Limited said, “We are very pleased to see the completion of Acquisition with SFH. New Oasis has franchise outlets throughout Southern China and we plan to add 450 franchise outlets in the current fiscal year. Apart from collaboration with existing large scale property developers, including R&F Properties, Evergrande Real Estate and Agile Property, we are also exploring strategic partnership with other potential major property developers, such as Poly Real Estate as well as Kingold Group.”
Ms Sandy Fletcher, Chief Financial Officer of Sustainable Forest Holdings Limited, concluded, “The Acquisition has broadened our business scope and income stream, strengthening our market position in the timber industry and improving our margins. Contracts on hand related to distribution and installation of flooring and other wood products directly to large scale property developers totaled more than RMB$120 million, according to a Sustainable Forest report.
We are confident that New Oasis will have a positive impact on our Group’s bottom line and create additional value to our shareholders”.
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