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Shuanghui to Kick off Restructuring Roadshow

01 December 2010

CHINA - Henan Shuanghui Investment & Development Co is also set to kick off roadshow of its complicated restructuring scheme from 3 December in four major cities of Shenzhen, Guangzhou, Shanghai and Beijing.

The restructuring scheme involves share placement to selected investors, absorption merger of five connected companies, tender offer by Rise Grand Group Limited, repurchase of certain stake from Rotary Vortex Limite and Rise Grand Group Limited becoming actual controller of Shuanghui Investment & Development.

Henan Shuanghui Investment & Development is to raise RMB32.2 billion through private placement to acquire all the meat processing assets from parent firm Henan Shuanghui Group. The Shenzhen-listed firm will issue a total of 632 million new shares to Henan Shuanghui Group and the latter firm's shareholder Rotary Vortex for RMB50.94 apiece.

This was over the closing price of RMB 49.48 before suspension of trading.

When the offering is complete, the issuer's total shares rise to 1.24 billion, of which 64.33 per cent or 797 million shares will be held by Henan Shuanghui Group, while Rotary Vortex will have an 11.92 per cent stake or 148 million shares.

Henan Shuanghui Investment & Development reaped RMB465 million in net profit in the first half of this year, 27.54 per cent more than in the corresponding period of 2009.

Wan Long, chairman of Shuanghui Investment & Development, said he is full of confidence that the company would grow at around 30% pace annually in coming three years and the company's sales incomes will reach CNY 100 billion by the end of 2015. The upcoming restructuring can eliminate competition between the Shenzhen-listed company and connected companies, laying foundation for sustainable growth, said Wan Long.

Shuanghui Investment & Development resumed A share trading on 29 November after eight-month suspension, which soon touched the daily upper limit after opening. The stock's turnover rate was 0.02 per cent.

China Merchants Securities set a target price of CNY 100 for Shuanghui Investment & Development. Shenyin Wanguo Securities expects the stock's market capitalization will expand to CNY 100 billion upon the completion of restructuring.

TheMeatSite News Desk

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