China Food Company PLC Update on Sale of Animal Feed Business (8566H)

TIDMCFC

RNS Number : 8566H

China Food Company PLC

23 May 2014

 
     Press Release       23 May 2014 
 

China Food Company Plc

("China Food", "Group" or the "Company")

Update on Sale of Animal Feed Business

and other expressions of interest

China Food Company Plc (AIM:CFC), a leading Chinese manufacturer of cooking and dipping sauces, today provides the following update on the sale of its animal feed business and other expressions of interest in the condiments business and investing in the Group.

Following the announcement in April 2014 regarding the animal feed sale, the discussions with the executive management team have advanced significantly and as result, the exclusivity period has been extended until mid-June 2014.

During the sale process regarding the animal feed business, the Group has received expressions of interest both for the condiments business on a standalone basis and for investing a minority stake in the Group.

The Company is pursuing these expressions of interests and such interest may or may not lead to an offer for either the condiments business or a minority investment in the Group.

As previously announced in December 2013, cash flow remains constrained and additional working capital facilities will be required so that the Company may increase its production to fully utilise its capacity. In the interim, the condiments business trades at an EBITDA neutral level. The Board continues to pursue opportunities for further debt finance in China.

- Ends -

For further information:

 
      China Food Company Plc 
      John McLean, Chairman        Tel: [phone] 
                                    www.chinafoodcompany.com 
 
 
      finnCap 
      Geoff Nash / Ben Thompson (Corporate       Tel: [phone] 
       Finance)                                                  0500 
      Mia Gardner (Broking) 
 
 
      Numis Securities 
      David Poutney (Joint Broker)       Tel: [phone] 
                                                         1000 
 

Media enquiries:

 
      Abchurch Communications 
      Joanne Shears / Canace Wong              Tel: [phone] 
                                                               7709 
      [e-mail]       www.abchurch-group.com 
 

Notes to Editors:

China Food is a well-established food manufacturing business based in Shandong province in the People's Republic of China, a region with a population of circa 94 million. A recent report identified Shandong province as one of the five most attractive 'city clusters' in China, due to the high number of large cities in the province*. The Group manufactures numerous different product lines including soya sauce and bean paste, all targeting the Chinese domestic market, and sold through a network of distributors and outlets of supermarket chains in the north-eastern region of the PRC, such as Walmart, Carrefour and Jialejia.

The Chinese sauces, dressings and condiments market is expected to be worth CNY115 billion (US$15 billion) by 2013, driven by Chinese population growth and economic prosperity. The Chinese domestic market is rapidly expanding, and the Group is well positioned to benefit from China's demographic growth and increased urbanisation.

The Group's operations are highly scalable and able to support further growth, and with net assets of GBP32 million (as at 30 June 2013), the prospects for China Food are strong. Further information on China Food Company can be found at www.chinafoodcompany.com.

This information is provided by RNS

The company news service from the London Stock Exchange

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