VANCOUVER, British Columbia, Nov. 27, 2018 (GLOBE NEWSWIRE) -- Sunshine Agri-Tech Inc. (TSX VENTURE: SAI) ("Sunshine Agri-Tech" or the "Company") announces that the Company has entered into agreements to sell off its equity interests in two of its subsidiaries in China, Changchun Grain Bio-Tech Co., Ltd. (“Changchun Grain”) and Changchun Sunshine Bio-Feed Co., Ltd. (“Changchun Sunshine”).
Changchun Grain
Changchun Grain is 51% owned by Dalian Sunshine Agri-Tech Inc. (“Dalian Sunshine”), which is another 100% owned subsidiary of the Company. Changchun Grain currently operates the Company’s livestock feed production and distribution business.
Dalian Sunshine entered into an agreement to sell its 21% equity interest in Changchun Grain to Dalian Anhe Investment Management Centre (Limited Partnership) (“Anhe”) for RMB2,100,000, which is approximately $402,299 (calculated on the exchange rate of RMB5.22 for $1 CAD). Anhe is the holder of the other 49% of Changchun Grain and after it acquires the 21% equity interest in Changchun Grain from Dalian Sunshine, it will own 70% equity interest in Changchun Grain. Dalian Sunshine entered into another agreement to sell its remaining 30% equity interest in Changchun Grain to Nongpaike Bio-Tech (Dalian) Co., Ltd. (“Nongpaike”) for RMB1,600,000, which is approximately $306,513.
Because the sale of 51% equity interest in Changchun Grain will be a disposition of more than 50% of the Company’s undertaking, the Company will be obtaining written consents from its shareholders in accordance of Policy 5.3 of the TSX Venture Exchange. In relation to obtaining written consents, the Company engaged Evans & Evans, Inc. to provide a valuation of Changchun Grain. The Comprehensive Valuation Report prepared by Evans & Evans, Inc. concluded that the fair market value of Changchun Grain was in the range of $960,000 to $1,140,000 as at August 31, 2018. Accordingly, the Company’s 51% equity interest in Changchun Grain has a fair market value in the range of $489,600 to $581,400.
The total proceeds to be received by the Company for the sale of 51% equity interest in Changchun Grain from Anhe and Nongpaike will be approximately $708,812, exceeding the range of fair market value of $489,600 to $581,400.
Changchun Sunshine
Changchun Sunshine is 100% owned by Dalian Sunshine. After Changchun Sunshine sold its operating business assets, including formulas for concentrated feeds and mix feeds as well as customers and market information to Changchun Grain in 2017, Changchun Sunshine currently only holds a land use right for 16,971 square meters located in the Changchun Economic Development Zone, which expires in 2060.
Dalian Sunshine entered into an agreement to sell its 100% of Changchun Sunshine to Jilin Province Wister Environmental Protection Science and Technology Co., Ltd. (“Jilin Wister”) for RMB 8,200,000, which is approximately $1,570,881.
All of Anhe, Nongpaike and Jilin Wister are not Non-Arm’s Length Parties of the Company. The transactions described in this news release are subject to approval of the Company’s shareholders pursuant to Policy 5.3 of the TSX Venture Exchange and are also subject to final acceptance by the TSX Venture Exchange.
About Sunshine Agri-Tech Inc.:
Sunshine Agri-Tech Inc. (TSX VENTURE:SAI) is a public company listed on the TSX Venture exchange. The Company is currently engaged in the research, development, production and sales of bio-feed, microbial feed additives and related products that aim to improve the health and performance of animals. The Company's products include microbial feed additives. The Company is based in the city of Dalian in the Peoples Republic of China.
On Behalf of the Board of Directors
SUNSHINE AGRI-TECH INC.
Baojun Zhang, PhD
Neither 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 release.
CONTACT INFORMATION
Sunshine Agri-Tech Inc.
Xiaozhu Pang
Chief Financial Officer
Tel: 778.865.2296