UPDATE: China Kunda: Potential stake sale may trigger takeover bid

Hong Kong coinsHong Kong coins

China Kunda Technology may see a takeover bid as a potential purchaser of its shares could end up with a more than 50 percent stake.

If the deal is completed, it would trigger a mandatory unconditional general offer for the company under the Hong Kong Takeovers Code, it said in a filing to SGX before the market open on Tuesday.

China Kunda, which is listed on both the Hong Kong and Singapore stock exchanges, said the potential purchaser was a company incorporated in the British Virgin Islands with limited liability, and its ultimate beneficial owners being third parties, independent of the company and its connected people.

The potential seller currently holds 300.74 million shares, or around 69.46 percent of the company, China Kunda said.

According to China Kunda’s annual report, China Hongda Holdings holds a direct interest in 30.04 percent of China Kunda’s shares, with Cai Kaoqun, who owns all of China Hongda, the indirect owner. Cai Koaqun is the founder and CEO of China Kunda.

China Kunda requested a lifting of its trading halt on Tuesday.

The purchaser has appointed Donvex Capital as its financial adviser on the potential takeover offer, the filing said.

On Monday, China Kunda reported it swung to a net loss of HK$286,000 (S$49,340) for its fiscal third quarter amid sales declines in the in-mould decoration (IMD) and plastic injection parts business.

Those segments of its business mainly supply to manufacturers in China of consumer electronics and electrical appliances to domestic and international markets, which have been hurt by a combination of poor market sentiment in China and a decrease in export sales to the U.S., the company said on Monday.

The company recently entered the furniture business in an attempt to diversify its income.

This article was originally published on Tuesday, 29 January at 8:53 A.M. SGT; it has since been updated.

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