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China Kangda sells Jilin business for 41m yuan
CHINA Kangda Food Company has agreed to sell its Jilin operations for a total of 41 million yuan (S$8.5 million).
It announced on Monday that two indirect wholly owned units have agreed to sell the equity stakes in Jilin Kangda Foods, which produces food products, and Laiwu Kangda Feeds, which sells feed products, as well as their sale loans.
When the sale is completed, the group will cease to hold any equity interests in these companies and will not have any direct operation and business in Jilin.
The group is dual-listed in Hong Kong and Singapore, and its business of breeding and sale and trading of rabbits will be focused in Shandong.
Explaining the reason for the disposals, China Kangda said that Jilin's climate is not suitable for the growth of rabbits, so it has been difficult for the yield to increase.
Though the company has invested a lot, the outcome has not been good, resulting in a high cultivation cost, China Kangda said.
"The directors believe that the disposal will enhance the cash flows of the group and reduce its borrowings," it added. "It will allow the group to redeploy its resources to working capital or investment in existing and future projects which will offer a better and more attractive return to the group."