National Agricultural Holdings to Acquire Shares in Hebei Sinoagri Boyuan Agricultural Machinery Company Limited
Working Hand-in-Hand with All China Federation of Supply and Marketing Cooperatives to Develop Agricultural Machinery Business
HONG KONG, Aug. 4, 2014 /PRNewswire/ — National Agricultural Holdings Limited ("National Agricultural", or together with its subsidiaries, the "Group"; stock code: 1236.hk) has announced that in order to support the upgrading of its nationwide supply and marketing system and the development of "agriculture, rural areas and farmers", in addition to better serving the participants in the "agriculture, rural areas and farmers" market, the Group has entered into a memorandum of understanding ("MOU") with Sinoagri Agricultural Machinery Holdings Company Limited ("Sinoagri Machinery Holdings") to acquire not more than 51% of the shares in Hebei Sinoagri Boyuan Agricultural Machinery Company Limited ("Hebei Sinoagri Boyuan"). Sinoagri Machinery Holdings holds a 55% equity interest in Hebei Sinoagri Boyuan. The planned transaction will help National Agriculture develop its agricultural machinery business.
Chinese government recently gave instructions to support the country’s supply and marketing cooperatives. According to the government, authorities at all levels must support the reform of the cooperatives, allowing the cooperatives to play their unique role and to make contributions to the development of China’s agricultural sector. As China National Agricultural Means of Production Group Corporation ("Sino-agri Group"), an enterprise under the umbrella of the All China Federation of Supply and Marketing Cooperatives, is the ultimate controlling shareholder of Sinoagri Machinery Holdings, this planned acquisition of shares underscores National Agricultural’s entry into a phase of asset integration and upgrade after establishing two agricultural trading platforms. Meanwhile, through cooperation with Sino-agri Group, National Agriculture can capture opportunities arising from agricultural mechanization, further strengthening its leading position in the "agriculture, rural areas and farmers" industry and contributing to the nationwide supply and marketing system.
Hebei Sinoagri Boyuan is one of the pioneers in the research and development and the manufacture of corn harvesting machines in China. Its principal business activities include the manufacture and sale of agricultural machinery such as corn harvesting machines and wheat harvesting machines. Hebei Sinoagri Boyuan has a registered capital of RMB50 million. In 2013, Hebei Sinoagri Boyuan sold approximate 3,400 agricultural machines, with sales and profit amounting to RMB489 million and RMB65 million, respectively. Sino-agri Group, Hebei Sinoagri Boyuan’s ultimate holding company, is an enterprise under the umbrella of the All China Federation of Supply and Marketing Cooperatives. Sino-agri Group generated revenue of more than RMB75 billion and sales of agricultural means of products, including fertilizers, amounting to 30 million tonnes in 2013.
Mr. Chen Li-jun, Chairman of National Agricultural, said, "National Agriculture has been cooperating with UnionPay Network and Guangzhou Exchange Group to jointly operate the agricultural payment business and trading business involving agricultural products, respectively. By working closely with Sinoagri Machinery Holdings, the Group will expand its agricultural product trading business to agricultural machineries trading. This will benefit the Group by providing a sustainable stream of cash flow, which will in turn enhance shareholder value. Meanwhile, the Group can capture opportunities arising from agricultural mechanization by upgrading the trading model for agricultural machinery and providing high-quality agricultural machinery trading services to farmers."
About National Agricultural Holdings Limited
National Agricultural Holdings Limited (SEHK code: 1236.HK) is a rural market-based company that integrates financial services, trade, information, industry and science research. Its principal businesses are rural finance, trading in agricultural means of production, management of commercial complexes and high-tech information technology, etc. These directives are fully implemented to accommodate China’s strategic goal of vigorously developing large-scale agriculture and a new model of urbanization. Hebei Supply and Marketing Cooperative made an equity investment in National Agricultural Holdings through its subsidiary Parko (HongKong) Ltd. in November 2013.