Zhongyou Jie can retire up to 315 million acquisitions of mainland LED light company Tongda

[High-tech LED News] Recently, CNPC Jieeng (00260) announced that it has completely acquired the mainland LED light company Tongda at a price of up to RMB 315 million (approximately HK$ 386 million). It will be paid in cash and the consideration shares, which will be paid 650 million shares at a price of 0.377 yuan per share (60.4% premium to the previous closing price), and the new shares will account for 14.4% of the issued share capital. The directors of CNPC believe that the LED acquisition is a milestone for the Group to implement its business strategy in the environmental protection sector.

It is understood that Tongxu Hengyuan, which is held by Tongda, has entered into a service contract worth about 229.8 million yuan. Tianxu will replace the existing street lights in some areas of China with LED lights in the form of BOT (construction-own-transfer). And operating and maintaining facilities for energy efficiency purposes for local government authorities in China.

The facility will also be transferred to the government at the end of the service contract period. Tianxu Hengyuan will charge a fixed annual service fee based on the service contract. According to the agreement, Tianxu Hengyuan will have an estimated total service contract value of RMB 6 billion on or before June 30, 2012. The term of the service contract is not less than 8 years and not more than 20 years.