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China soya sauce maker's shareholders mull sale

Hong Kong

SHAREHOLDERS of Honworld Group Ltd are exploring a sale of the Chinese soya sauce maker, which sells products under the "Lao Heng He" brand, people with knowledge of the matter said.

Owners are working with an adviser on a possible sale of more than 49 per cent of the Hong Kong-listed firm, said the people, who asked not to be identified because the information is private.

The adviser reached out to potential buyers including China's Foshan Haitian Flavouring & Food Co and Hong Kong's Lee Kum Kee Co, the people said.

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Any deal would add to the US$18.3 billion of announced acquisitions of Asia-based food companies over the last 12 months, data compiled by Bloomberg shows.

Japanese seasoning company Ajinomoto Co last November sold Amoy Food Ltd, a century-old firm that makes Hong Kong's most popular soya sauce, to Citic Capital Holdings Ltd.

Honworld founder Chen Weizhong has pledged most of his 49 per cent stake in the company to China Construction Bank Corp, Honworld's latest interim report shows. Chinese tycoon Xie Zhikun owns about 13 per cent.

Deliberations are at an early stage, and the shareholders of the Huzhou-based firm could still decide against a sale, the people said. Representatives at Honworld and Lee Kum Kee didn't respond to requests for comment, while a representative for Haitian had no immediate comment.

Shares of Honworld fell 3.3 per cent on Tuesday, giving the company a market value of HK$2.2 billion (S$379 million).

In addition to soya sauce and vinegar, Honworld's products include Hunan-style hot sauce, cooking wine and fermented bean curd, according to its website. BLOOMBERG