LONDON, UK: Jade Road Investments Limited (AIM: JADE) has successfully negotiated a partial divestment in Meize Energy Industries Holdings Limited, one of the leading privately-owned wind turbine blade manufacturing companies in China, currently the third-largest holding in the Company’s portfolio, a bourse filing noted.
On the 23rd of November 2011, the Company, through its wholly-owned subsidiary Swift Wealth Investments Limited, subscribed to USD7.5MM of Series B Preferred Shares. This investment equates to a shareholding of approximately 7.2% in Meize Energy Industries.
The Company is pleased to announce that it has entered into a share purchase agreement (“SPA”) for 112,500 shares of the Series B Preferred Equity in Meize Energy Industries for consideration of USD1.2 million.
The Transaction Price will be received by the Company in three equal tranches. The number of shares sold in this partial divestment represents 12.0% of the Company’s holding in Meize. The Company will hold approximately 6.3% interest in Meize post this divestment.
Before the release of this RNS, the Company received the First Tranche Price of USD400,000. The Company expects to receive the Second and Third Tranche Price in late July and August 2022 as agreed in the SPA.
The Transaction Price implies a valuation of USD10.0 million for the Company’s investment in Meize, which indicates a 22.0% premium to the carrying value as at the 30th of June 2021 (USD8.2 million). The profit from this disposal is USD0.3 million.
This divestment, of which the sale consideration is settled offshore, marks the culmination of a lengthy and successful turnaround effort by the Company for private investment in China.
John Croft, Chairman of Jade Road commented: “Exiting private equity positions held in Chinese companies requires patience as well as persistence, but as demonstrated by this announcement, exits can be achieved, and in this case, at a premium to the value of the asset held in our books. Whilst having no direct connection with other privately held Chinese assets in our portfolio, it does provide clear evidence that these assets have real value and that in time realisations can be made delivering cash returns into the Company.”