Newtree (HKG:1323) further changes use of IPO proceeds


Newtree Group Holdings (HKG:1323) announced again that it has decided to change the use of proceeds from the global offering.

The company said that as there is further delay in obtaining the certificates for the production premises in the PRC, its board of directors has determined not to proceed for Plan I that approximately HK$142.8 million will be used for construction of new production premises in the PRC and purchase of manufacturing equipment for the new production facility for the manufacture of clinical disposables for the PRC market, representing approximately 90% of the net proceeds.

Plan II refers to that approximately HK$28.6 million will be used for the acquisition of the land use rights for a parcel of land earmarked for the construction of the new production facility in the PRC.

The company said that it had already changed the use of proceeds originally allocated for Plan I to an extent of approximately HK$47 million to be used for the acquisition of the entire issued share capital of Sino-Singapore (Offshore) Chemical Resources Trading Company Limited (target) and the subsidiary of which is principally engaged in the business of methyl tertiary butyl ether (M.T.B.E.); and capital commitment of US$2.75 million of the target.

The company said that the group’s principal business has now been enlarged to include the trading of the M.T.B.E. business and expected that the M.T.B.E. business will become another driving force of the group in the foreseeable future. In view of this, it was resolved by the board that the intended use of the unutilized proceeds of approximately HK$62.4 million originally allocated for Plan I be changed to facilitate the growth of the M.T.B.E. business.

Further, the board intends to diversify the existing business of the group in the field of trading polyethylene. The board expects that the material cost can be reduced with volume purchase from the suppliers and potential profit can be generated from the trading of the polyethylene. It was resolved by the board that the use of proceeds of approximately HK$33.4 million and HK$28.6 million originally allocated for Plan I and Plan II respectively be changed to the trading of polyethylene.

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