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Baida acquiring strategic stake in E3 Holdings
Proposed share subscription will make it the single largest shareholder
By OH BOON PING
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BAIDA Finance (Group) Company Limited, a Hong Kong-based firm involved in project investing and financing, is taking a strategic stake in E3 Holdings, with plans to turn it around through project collaboration.
E3 said yesterday that Baida will subscribe for 217.98 million new E3 shares - or about 11.1 per cent of the enlarged share capital - at a price of about $5.89 million cash or 2.7 cents per share.
The proposed stake - which is subject to Singapore Exchange listing approval for the subscription shares - will make Baida the single largest shareholder.
E3's announcement yesterday said Baida has 20 years of experience in international project investing and financing, foundation structuring, and equity and collateral financing.
Baida's chief executive Ngai Keong said the move is a strategic one not just because of ongoing collaboration in a real estate project in Changchun City, Jilin Province but also the joint exploration in a number of new projects such as mining and water sectors.
He added: 'We have done the due diligence and we are confident that E3 will not take long to return to profitability.'
For the year ended June 30, 2008, E3's net loss widened to $4.5 million from $2.37 million despite a 73 per cent jump in sales to $884,000.
Both E3 and Baida are currently in a project to procure, develop, construct and manage 12-square kilometres of land earmarked for the development of an integrated eco-financial city-centre in Changchun City, Jilin Province.
Besides property, Baida also has interests in developing mineral mines in China that include gold, silver, copper and iron, and in the renewable energy segment.
Baida, for example, is involved in a project to develop China's largest solar products base in Shanghai, for exports to the Middle East, the United States, Europe and South-east Asian countries.
Since its inception, Baida has managed more than 22 projects with a total investment of HK$1.4 billion (S$257 million), and achieved a turnover of HK$186 million in 2007.
As E3 has identified property and renewable energy as its new business focus, the partners said the investment will yield synergistic benefits.
However, the Catalist- listed firm had earlier dropped its proposed acquisition of a 49 per cent stake in Song Yuan Petrochemical Co Ltd (SYPC) which owns and operates an oil refinery in China, citing the capital and management resources required.
Jade Technologies Holdings had in May pulled out of a partnership with E3 to acquire the stake in SYPC.
E3 shares closed half a cent up at 2.5 cents yesterday.
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