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TERRATECH Group has entered into a framework agreement to acquire 100 per cent of the equity interest in Meilian Changchi, a Chinese company that produces and sells marble tiles and marble mosaic tiles, through consideration shares worth approximately S$15.44 million.
The consideration shares, when issued, will represent approximately 23.22 per cent of the enlarged share capital of Terratech Group after taking into account the existing issued share capital on Wednesday.
The purpose of the proposed acquisition is primarily to enable the group to undertake, through Meilian Changchi's factories, in-house processing of marble slabs to enjoy greater efficiencies and costs savings.
Through the established customer base and sales network of Meilian Changchi, the group can also expand the sales and marketing of its products to other overseas markets including the Americas and Middle East markets.
Under the terms of the framework agreement, Meilian Changchi have agreed to a moratorium where they undertake not to sell or transfer any of the consideration shares for a period of one year after the completion of the proposed acquisition, and not to sell or transfer consideration shares exceeding 50 per cent of their shareholding for a period of three years after the completion of the proposed acquisition.
The company will be seeking approval for the additional business diversification arising from the proposed acquisition from shareholders at the extraordinary general meeting to be convened.