Disposal of Equity Interest in Long Prosperity

 

TIDMYGH 
 
RNS Number : 7503Y 
Yinggao Holdings PLC 
09 September 2009 
 
Yinggao Holdings plc 
 
 
("the Company") 
 
 
Disposal of Equity Interest in Long Prosperity Industrial Limited 
 
 
Yinggao Holdings plc announces today that a wholly owned subsidiary of the 
Company, Yinggao Energy Limited ("YEL") has agreed to sell the 100 per cent. 
equity interest it owns in Long Prosperity Industrial Limited ("LPIL") to a 
related company, Winko Foundation Limited ("WFL"), whose sole shareholder Keen 
Lloyd Holdings Limited is also the major shareholder of the Company, holding 
92.06 per cent. of the Company's issued share capital. 
The only asset owned by LPIL is a 59.2 per cent. stake in Hubei Chang Zhou Power 
Development Limited ("HCPD"), a joint venture company operating a coal-fired 
power plant in Hubei , China. The power plant ceased operation in the third 
quarter of 2007 and has shut down following an agreement signed with the local 
government in June 2007. 
An announcement was made on 4 June 2008 by the Company detailing that the value 
of the property, plant and equipment at the power plant in Hubei was to be 
wholly written off. As a result, the power plant now carries no value in the 
balance sheet of the consolidated accounts of the Company and no longer makes 
any contributions to the Company. 
In terms of liabilities, HCPD is the borrower in respect of the US$1.9 million 
loan from Industrial and Commercial Bank of China Limited. This was the disputed 
loan which lead to the qualification in the audit report for the year ended 31 
December 2008. In addition, HCPD may incur decommissioning costs of 
approximately GBP300,000 in respect of the power plant if it is not sold prior 
to 2010. The result of the sale of the shares in LPIL to WFL is that the 
liabilities and issues that currently sit in either LPIL or its subsidiary HCPD 
will thereafter be outside the Company and the Company's consolidated accounts 
will have significant uncertainties removed from them. 
Under the sale and purchase agreement YEL will dispose of the 5,000 ordinary 
shares it owns in LPIL to WFL for a nominal consideration of HK$1.00. In 
addition, the agreement states that YEL will be paid 50 per cent. of any amount 
recoverable by LPIL as a result of the legal proceedings in which LPIL is 
currently engaged as co-plaintiff with Global Assets Limited and Walton 
Enterprises Limited against Sun Hung Kai Securities Limited for breach of 
contract in relation to the sale of equity in HCPD. 
The independent directors of the Company, having consulted with Daniel Stewart & 
Company plc, the Company's nominated adviser, consider that the disposal of 
YEL's equity interest in LPIL is in the best interests of the Company and that 
the terms of the transaction as fair and reasonable insofar as Shareholders are 
concerned. 
 
 
For further information: 
Angela Leung                                    Tel:  + 852 2219 9999 
Yinggao Holdings plc 
www.yinggaoholdings.com 
 
 
 
 
Paul Shackleton 
Daniel Stewart & Company plc    Tel: + 44 (0) 207 776 
6550 
www.danielstewart.co.uk 
 
 
 
 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
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