Sale of China Property

RNS Number : 8368Y

API Group PLC

11 July 2008

 



11 July 2008

API Group Confirms Sale of Surplus Property in China for

Gross Proceeds of Rmb99.8m (£7.3m)

API Group plc ('API' or the 'Company') today confirmed the sale of its former factory site in Shanghai, China for gross proceeds of Rmb99.8m (£7.3m) to be satisfied in cash (the 'Transaction').  The sale, by API's joint venture company, Shanghai Shen Yong Stamping Foil Co., Ltd ('SSY') to Da Ning International Community Development and Construction ('Da Ning'), follows the relocation of manufacturing operations to a new purpose built facility on the outskirts of Shanghai.

An initial Rmb40m (£2.9m) has been received from Da Ning in relation to the Transaction with the remainder due in two instalments in the coming months, subject to final vacation of the site.  Net proceeds will be subject to deduction of certain revenue cost associated with the move and any tax liability determined by the Chinese authorities. 

Net proceeds from the sale will be used to pay down loans raised to finance the factory relocation and return SSY to a debt-free position. The Transaction will also contribute to the Group's overall debt reduction objectives.

SSY is China's leading manufacturer of hot stamping foils used in packaging and other applications and is a former state owned enterprise.  API acquired its 51% interest in 1999 through a joint venture agreement with Wing Fat Printing Company Limited of Hong Kong and Shanghai Light Industrial Corporation. SSY employs 250 people and produces metallic foil for the Chinese market and for export through API subsidiaries in Europe and Asia Pacific.  

API Chief Executive, Andrew Turner, said 'Realisation of the old site's land value will partially offset the £11m invested in relocating our Shanghai operations to a more appropriate location in one of city's industrial zones.  The new 350,000 square foot facility has been built to the latest safety and environmental standards and provides SSY with a platform for increased operational efficiency.' 

Enquiries:

Andrew Turner, Group Chief Executive,  API Group plc	01625 650334
Nicola Biles, Financial Dynamics	020 7831 3113
Numis Securities Limited Nick Westlake - Nominated Advisor James Serjeant, Corporate Broking	020 7260 1000

 

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