Fong's Ind (HKG:0641) buys textile machinery biz


Fong's Industries Company (HKG:0641) announced that Fong's Industries and Possehl, which has been a joint venture partner for certain of the Fong's Industries' operations in greater China, entered into an acquisition agreement and a subscription agreement, pursuant to which, certain European companies representing Possehl’s operations in Germany and Austria in the textile machinery manufacturing business will be acquired by Fong's Industries through Fong’s Manufacturers.

In addition, a group restructuring will take place whereby Fong’s Projects will become the intermediate holding company for the textile machinery manufacturing business in Germany, Austria, Macau, Hong Kong and the PRC. Meanwhile, Possehl will subscribe for a 9.9% shareholding in and advance the shareholder’s loan to Fong’s Projects at a consideration of EUR9 million (HK$86.94 million).

Subject to completion of the subscription agreement, Fong’s Manufacturers will grant the put option to Possehl, and Possehl will grant the call option to Fong’s Manufacturers. If either the put option or the call option is exercised after the third anniversary of the completion date, Fong’s Manufacturers will acquire this 9.9% stake and the shareholder’s loan at the option consideration

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