December 8, 2014
RRJ Capital injectsUS$248.41 millioninto Shanghai Bright Holstan
Bright Dairyannounced on the Shanghai Stock Exchange website last week that.
Chatsworth Asset Holding, a subsidiary of RRJ Capital, had signed an agreement with the companyand Shanghai Bright Holstan.
Under the agreement, Chatsworth will be injectingRMB1.53 billion (US$248.8 million) into Holstan as capital increase, after which Chatsworth will have a 45% stake in Holstan. This will see BrightDairy''s stake in Holstanfell from 100% to 55%, and Holstan''s registered capital increase from RMB456.84 million (US$74.29 million) to RMB830.62 million (US$135.07 million).
In addition, the companies also plan to have their newly formed joint venture listed within five years. Though they did not reveal the listing venue or the funds to be raised, it is made known that if Holstan fails to list within five financial years, RRJ can redeem all or part of its 45% in Holstan.
The addition capital injected by RRJ will be used by Holstanto build and manage dairy farms whereits livestock husbandry business willdouble in the next three to five years, according to Bright Dairy.
Furthermore, RRJ''s equity injection in Holstan will also promote sales of Bright Dairy''s related products such as animal feed, ensure food safety, bolster the branding and help Bright Dairy realise its strategy to be "a leader in high-end Chinese dairy products", the Chinese company added.
It is estimated that Holstein''s revenue in the next three to five years will likely exceed RMB1.7 billion (US$276.45 million) and if Holstein can list successfully in five years, its market value will be RMB7 billion (US$1.14 billion).