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Dukang Distillers plans exit from liquor business, enters into kiwi cultivation
CHINA'S baijiu maker Dukang Distillers Holdings has entered into a conditional acquisition and disposal agreement to sell its white liquor business and at the same time buy a kiwi cultivation business, with both proposed transactions priced exactly at 1.11 billion yuan (S$220 million) each.
Dukang, which is listed on the Singapore Exchange, announced on Nov 17 these proposed transactions with the same company Keen Wind Limited. Both the acquisition of Great Resolute Limited - amounting to a very substantial transaction and involved an interested person - and the planned sale of its baijiu or white liquor production subsidiary Sea Will International, would require the approval of shareholders.
Therefore, Dukang is convening a special general meeting, the date of which has yet to be announced, for these two proposed transactions.
Great Resolute is an investment holding company incorporated in 2018 with a paid-up capital of US$100, and would through a subsidiary own the kiwi cultivation business Xingnong Agriculture. As the controlling shareholder of Dukang, Wang Peng, owns 70.27 per cent in Xingnong Agriculture, the proposed acquisition of Great Resolute would therefore be deemed an interested person transaction.
Dukang cited the recent losses and declining profitability in its baijiu business as one of the reasons for exiting the liquor market. On the other hand, it believes that fruit farming and the processing industry would provide it with a "steady revenue stream".
The counter last traded unchanged on Nov 13 at 24 Singapore cents.