Andatee CMFS (AMCF) Announces $540K Acuquisition of 52% Stake in Mashan Xingyuan
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Andatee China Marine Fuel Services Corporation (Nasdaq: AMCF) today announced that the Company has signed an equity transfer agreement under which Andatee is to acquire 52% equity of Mashan Xingyuan Co., Ltd., a company located in Rongcheng City, Shandong Province, PRC. ("Mashan Xingyuan")
Under the terms of the agreement, Andatee will acquire 52% of Mashan Xingyuan for a cash payment of RMB 3.64 million (approximately US$ 0.54 million) and the assumption of RMB 0.54 million (approximately US$ 0.08 million) in debt. In exchange, Andatee will gain control of Mashan Xingyuan's assets, which include three 1,000 cubic meter storage tanks, three 500 cubic meter storage tanks, equipment and facilities, as well as 3,600 square meters of land use rights. Mashan Xingyuan was founded in Rongcheng, Shandong province and is an important blended marine fuel retail outlet in the region. Andatee's sales in that region were 3,000 tons of marine fuel in 2009. The Company estimates that the market opportunity at Mashan Xingyuan's facility can reach 12,000-15,000 tons of marine blended oil annually within 12 to 18 months of completing the acquisition.
"The acquisition of Mashan Xingyuan will advance our strategy to leverage our management expertise, brand name recognition and access to capital to expand our distribution network in key fishing and small cargo vessel ports in China," said Mr. An Fengbin, Chairman and Chief Executive Officer of Andatee. "We look forward to working with the Mashan Xingyuan team to ensure a rapid and seamless integration, as we continue to execute on our vision of becoming a leading one-stop marine services depot in China."
In addition, Mashan Xingyuan has also committed to purchase 9,000 tons of marine blended fuel from Andatee at the wholesale price. The 9,000 tons will, in turn, be sold to retail customers, whereby the Company will receive an additional 52% of the profit as a result of this transaction. As a result, Andatee expects Mashan Xingyuan to contribute annual revenue of RMB 40 million (approximately US$5.9 million) and net profit of RMB2.1 million (approximately US$ 0.31 million) to be accretive the Company's earnings
The acquisition, which is subject to customary closing conditions, is expected to be completed in the next 3 days.
Under the terms of the agreement, Andatee will acquire 52% of Mashan Xingyuan for a cash payment of RMB 3.64 million (approximately US$ 0.54 million) and the assumption of RMB 0.54 million (approximately US$ 0.08 million) in debt. In exchange, Andatee will gain control of Mashan Xingyuan's assets, which include three 1,000 cubic meter storage tanks, three 500 cubic meter storage tanks, equipment and facilities, as well as 3,600 square meters of land use rights. Mashan Xingyuan was founded in Rongcheng, Shandong province and is an important blended marine fuel retail outlet in the region. Andatee's sales in that region were 3,000 tons of marine fuel in 2009. The Company estimates that the market opportunity at Mashan Xingyuan's facility can reach 12,000-15,000 tons of marine blended oil annually within 12 to 18 months of completing the acquisition.
"The acquisition of Mashan Xingyuan will advance our strategy to leverage our management expertise, brand name recognition and access to capital to expand our distribution network in key fishing and small cargo vessel ports in China," said Mr. An Fengbin, Chairman and Chief Executive Officer of Andatee. "We look forward to working with the Mashan Xingyuan team to ensure a rapid and seamless integration, as we continue to execute on our vision of becoming a leading one-stop marine services depot in China."
In addition, Mashan Xingyuan has also committed to purchase 9,000 tons of marine blended fuel from Andatee at the wholesale price. The 9,000 tons will, in turn, be sold to retail customers, whereby the Company will receive an additional 52% of the profit as a result of this transaction. As a result, Andatee expects Mashan Xingyuan to contribute annual revenue of RMB 40 million (approximately US$5.9 million) and net profit of RMB2.1 million (approximately US$ 0.31 million) to be accretive the Company's earnings
The acquisition, which is subject to customary closing conditions, is expected to be completed in the next 3 days.
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