Tritech Group Limited said it had on Aug 20, 2015 entered into an investment framework agreement with a Chinese firm Zhong Xu Kang Yi for the latter to inject 120 million yuan (S$26.14 million) in cash as paid-up capital of Tritech's wholly-owned unit, Tritech Vavie Health Care Technologies Co Ltd, in exchange for a 60 per cent stake in Tritech Vavie.
The company will ensure that the value of the assets of Tritech Vavie will be no less than 80 million yuan and will hold the remaining 40 per cent stake in Tritech Vavie after the completion of the investment by Zhong Xu Kang Yi.
Upon completion of the deal, Tritech Vavie will cease to be an indirect wholly owned subsidiary of Tritech group.
The group said the proposed investment will allow the company to leverage on the financial strength and distribution channels of Zhong Xu Kang Yi to speed up its foray into the Chinese market to tap on consumers' demand for water dispensers and bottled drinking water.
At the same time, with the additional funds raised from the proposed deal, the company can concentrate on further developing its strength in the development and production of water dispensers and bottled drinking water.
The capital injection by Zhong Xu Kang Yi will take place in tranches. Upon receipt of the first tranche of injection, Tritech and Zhong Xu Kang Yi will appoint the board of directors consisting of three members. Zhong Xu Kang Yi will appoint a managing director and a director while Tritech will appoint a deputy managing director to the board of Tritech Vavie. Both Tritech and Zhong Xu Kang Yi will also appoint suitable personnel to take up management roles at Tritech Vavie.