China Private equity has announced that it is buying four domestic Chinese businesses. The deals are large enough to constitute a reverse takeover under the AIM rules and so CPEH will suspend its shares and prepare a new admission document encompassing the proposed transaction.
To finance the transaction, CPEH needs to raise £3m by issuing new shares. The seller, Elypsis (a wholly owned subsidiary of a fund managed by Adamas Asset Management HK Ltd) will end up owning 86% of CPEH’s share capital. CPEH will change its name to Adamas Finance Asia. Shareholders will get one new share for every three they hold now and warrants to subscribe for one new share for every two new shares held at a price of $0.06, exercisable within 12 months.
The businesses to be acquired comprise CJRE, a resort and residential project built around hot springs in Tian Tong Shanin Zhangzhou, Fujian Province; Global Pharm, a pharmaceutical company specialising in traditional Chinese medicine; HKMI which owns a dolomite magnesium limestone mine in Shanxi (HKMI is planning an IPO in 2014); and Meize Energy, a wind turn bine blade design and manufacturing company.