Kong, October 26, 2006) -- Leading Hong Kong plastic resins and specialty
colourants supplier Ngai Hing Hong Company Limited (the ¡§Company¡¨) and its
subsidiaries (the ¡§Group¡¨) (Stock code: 1047) announced its cooperation with
PolyOne Corporation (¡§PolyOne¡¨), a company listed in New York Stock Exchange, to
jointly develop the polyvinyl chloride (PVC) market in China. It is done with a
partial disposal of the Group¡¦s assets which are sold to PolyOne.
Pursuant to the agreement, the Group will sell part of the assets of its indirectly owned subsidiary, Ngai Hing PlastChem Company Limited (¡§NH PlastChem¡¨), which is mainly engaged in vinyl compound business, and the Dongguan Factory, to PolyOne with a total consideration of HK$40,200,000. Thereafter, the Group will purchase a 5% stake in PolyOne Vinyl Compounds Asia Holding Limited (¡§PolyOne Vinyl Compounds¡¨), a subsidiary of PolyOne focusing in PVC business, with a consideration of HK$2,000,000. Upon completion of the transaction, both parties will pay the considerations concerned in cash.
In addition, after the transaction is completed, PolyOne will subscribe an aggregate of 6,000,000 shares of Ngai Hing Hong at a price HK$0.5 per share representing approximately 1.67% of the existing issued share capital of the Group and approximately 1.64% of the enlarged issued share capital of the Group. The subscription price of HK$0.5 per share represents a premium of approximately 7.6% to the average closing price of HK$0.4645 per share as quoted on the stock exchange for the last 10 days up to and including the last trading day before the suspension of trading on 19 October 2006. Two directors of NH PlastChem, Dr. Joseph Lam and Mr. Roy Yip will be seconded to PolyOne Vinyl Compounds and they will participate in the management of PolyOne Vinyl Compounds.
Mr. Hui Sai Chung, Chairman of Ngai Hing Hong, said, ¡§This transaction cannot be considered as pure asset disposal. Instead, we are collaborating with a renowned player in our industry to jointly develop the PVC market in China. We are very optimistic about the PVC market in China. With the synergies generated from our Group and PolyOne, we expect to achieve a win-win situation. At the same time, by introducing PolyOne as one of our shareholders, we can further strengthen our business partnership as well as the Group¡¦s shareholder base.¡¨
PolyOne is a leading global compounding and North America distribution company with operation in thermoplastic compounds, specialty PVC resins, specialty polymer formulations, colour and additive systems and thermoplastic resin distribution. Riding on Ngai Hing Hong¡¦s experience in the China market, its broad network and industry talents, together with PolyOne¡¦s clientele in Asia, diversified product series, extensive market experience and technical expertise, the Group is confident of boosting the development of PVC business and enhancing its competitive edge and market position in China.
About Ngai Hing Hong Company
Ngai Hing Hong provides a total solution to plastic products manufacturers with services and products ranging from plastic resins (including polymers and engineering plastics) selection, complementary computerised colour matching services, on the spot technical advice, to the supply of custom-made plastic colourants, engineering plastics and PVC compounds for the plastics industry.