TORONTO, ONTARIO -- (Marketwired) -- 05/29/13 -- China Green Star Agricultural Corporation (TSX VENTURE: GRE) (the "Company") today announced that its Chinese operating subsidiary, Fujian Province Pucheng County Star of Green Food Stuff Company Ltd. (the "Purchaser"), has entered into a binding Letter of Intent (the "LOI") to acquire a Chinese tomato pulp producer, located in northeastern China. The acquisition price, of 35 Million RMB (CDN $5.8 Million) will be satisfied in cash. The transaction is expected to close in the third quarter, and is subject to a number of closing conditions including satisfactory due diligence, the execution of a definitive share purchase agreement, certain financing conditions, receipt of all regulatory and third party approvals and consents, and the usual closing adjustments that will be more specifically outlined in the definitive share purchase agreement.
Based on unaudited management accounts of the acquisition target, the target had 2012 revenues of 64 Million RMB (CDN $10.2Million) with a net profit of 14 Million RMB (CDN $2.3 Million). Approximately 44% of the tomato pulp producer's production was shipped to GRE's Pucheng, Fujian Province based tomato paste manufacturing facility in 2012.
Commenting on the proposed acquisition Mr. Guan Lianyun, the Company's CEO, stated "This proposed acquisition will be our Company's first as a Public Company. We believe this acquisition will ensure our supply of high quality raw tomato pulp, an essential ingredient in our tomato paste production which represented over 50% of our annual revenues in 2012."
About China Green Star Agricultural Corporation
Green Star operates two main divisions, agricultural and food processing. The agricultural division is involved in the cultivation and harvesting of agricultural products such as fresh fruit and vegetables, for sale either directly as fresh fruit and vegetables or canned, and sold overseas and domestically. The food processing division is primarily involved in the processing of canned food, which includes canned tomato paste, canned boiled bamboo shoots, canned oranges, canned peaches and various other types of fruits and vegetables.
Green Star has been operating for over 19 years. Through the application of science and technology in production, quality control and assurance, and business operations and management, Green Star has focused on maintaining product and reputational excellence with a high standard of food quality. Key assets include a well established management team, modern production facilities, and a close partnership with local farmers.
China Green Star Agricultural Corp. is listed on the TSX Venture Exchange under the symbol "GRE".
Caution Regarding Forward-Looking Information:
Certain statements in this press release may constitute ''forward looking'' statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements.
When used in this press release, such statements may use such words as ''may'', ''will'', ''expect'', ''believe'', ''plan'' and other similar terminology. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this press release. Forward looking information in this press release includes but is not limited to, the Company's expectations regarding the terms of the acquisition, the receipt of regulatory approvals for the acquisition, the completion of the acquisition, the anticipated timing for completion of the acquisition and the execution of a definitive share purchase agreement, and management's belief that the acquisition will ensure the Company's supply of high quality raw tomato pulp. These forward looking statements involve a number of risks and uncertainties including the risk that the parties fail to enter into a definitive agreement, Some of the factors that could cause actual results to differ materially from those expressed in or underlying such forward looking statements are the effects of, as well as changes in: international, national and local business and economic conditions; political or economic instability in the Company's markets; competition; legislation and governmental regulation; and accounting policies and practices. The foregoing list of factors is not exhaustive. Please see the Company's annual MD&A dated April 25, 2013, available on www.sedar.com, for a more detailed description of the risk factors. The Company undertakes no obligation to update publicly or revise any forward looking information, whether a result of new information, future results or otherwise, except as required by law."
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
China Green Star Agricultural Corporation
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