Chinese textile group to control John Master
Source: Bloomberg Date: 2009-07-31
A CHINESE textile group plans to buy a controlling stake in John Master Industries Bhd, a Malaysian clothing maker and property group, in a reverse takeover valued at RM328.1 million.
John Master will issue new shares, convertible bonds and make a rights offer to acquire Be Top Group Ltd, the holding company of China-based fabrics maker Top Textile (Suzhou) Co, the Kuala Lumpur-listed firm said in a statement today.
Be Top’s owners, brothers Pan Ding and Pan Dong, will own as much as 42 per cent of John Master after the deal, it said.
The transaction gives John Master access to a garment manufacturing and trading business with overseas markets including the US, China, Russia, France and India. The new owners will also provide a profit guarantee of at least 100 million yuan for 2009, the company said.
“The new viable assets or businesses are expected to provide a different source of future income” for John Master, the company said in the statement.
The plan represents a back-door listing for Top Textile, which will become the second Chinese group seeking to trade their shares on Malaysia’s stock exchange this year. On June 30, the Malaysian government eased ethnic ownership rules, scrapping the need for overseas companies and publicly traded Malaysian businesses to set aside 30 per cent of their equity to local ethnic Malay investors.
Asset Sale
Under John Master’s plan, the Malaysian company will first sell its entire clothing and property businesses to Yoon Foong Garments Sdn Bhd for RM78.5 million, which will be distributed to shareholders under a capital repayment.
After that, Be Top will be injected into John Master, the Malaysian company said in the statement. Top Textile supplies its fabric to China, US, Russia, Mexico, Belgium, France, India, Hong Kong, Bangladesh and Korea, according to the statement.
John Master rose 8.1 per cent to 73.5 sen on July 27 before its shares were suspended. They will resume trading on July 29. -
