TIDMGTS
RNS Number : 9181S
GTS Chemical Holdings PLC
30 September 2014
GTS Chemical Holdings plc
(The "Company" or "GTS")
Interim Results for the six months ended 30 June 2014
GTS Chemical Holdings plc (AIM: GTS), an established, profitable
and fast growing specialty chemicals producer, is pleased to
announce its results for the six months ended 30 June 2014, which
will be available for download today from the Company's website
www.gtschemical.com.
Financial Highlights
-- Turnover up 73.7% to RMB 309 million (period to 30 June 2013: RMB 178 million)
-- Gross profit up 61.5% to RMB 63 million (period to 30 June 2013: RMB 39 million)
-- Gross margin of 20.4% (period to 30 June 2013: 22.0%)
-- Net profit up 42.9% to RMB 39 million (period to 30 June 2013: RMB 27 million)
Chairman's Statement
The inaugural Chairman's statement accompanies the unaudited
consolidated accounts relating to the period from 1 January 2014 to
30 June 2014.
I am pleased to report a strong increase in sales in H1 2014 of
73.7% to RMB 309 million from RMB 178 million in H1 2013.
Revenue Six months Six months Year ended
ended 30 June ended 30 June 31 December
2014 2013 2013
Unaudited Unaudited Pro forma
RMB'000 RMB'000 RMB'000
Specialty chemicals 214,186 177,908 405,229
Lubricating oils 62,811 - 47,011
Recarburizer 31,963 - 30,620
Total 308,960 177,908 482,860
Our main business, specialty chemicals, comprising ammonium
sulfite and ammonium bisulfite, represented 69.3% of Group sales,
generating RMB 214 million of revenue during the period, an
increase of 20.4% compared to H1 2013.
Sales in the lubricating oils division, which began trading in
July 2013, are line with the Company's expectations, reaching RMB
62 million in H1 2014 (H2 2013: RMB 47 million). The division now
represents 20.3% of Group revenue (H2 2013: 15.4%). The increase in
sales has been driven by enlarging the distributor network and
increasing national coverage, from 18 distributors across 9
provinces at the beginning of the period to 43 covering 24
provinces by 30 June 2014.
The recarburizer division, which also began trading in July
2013, has performed consistently, generating revenue of RMB 32
million (H2 2013: RMB 31 million). The distributor network has also
been expanded, from 11 distributors across 6 provinces at the
beginning of the period to 13 distributors in 6 provinces as at 30
June 2014.
Gross profit in the period has risen by 61.5% to RMB 63 million
from RMB 39 million in H1 2013.
Gross profit Six months Six months Year ended
ended 30 June ended 30 June 31 December
2014 2013 2013
Unaudited Unaudited Pro forma
RMB'000 RMB'000 RMB'000
Specialty chemicals 45,699 40,168 85,794
Lubricating oils 12,260 - 11,486
Recarburizer 6,356 - 7,275
Gross profit 64,315 40,168 104,555
Local taxation (1) (1,178) (1,060) (2,132)
Gross profit (after sales taxes) 63,137 39,108 102,423
Gross margin % 20.4 22.0 21.2
(1) Comprises urban maintenance and construction tax, education
and local education surtax and water conservation construction
fund
Gross margin has decreased over the period to 20.4% from 22.0%,
due in part to higher sales of lubricant oils. Sales of lubricant
oils and purchases of base oils are generally subject to a
RMB1/litre consumption tax; with consumption tax paid on the
Group's base oil purchases deducted from consumption tax payable on
the Group's lubricant oil sales.
When the Group commenced trading in lubricant oils, it purchased
raw materials from distributors; consumption tax was not
recoverable on these purchases. During the period, the Group began
sourcing base oils directly from manufacturers; consumption tax on
these purchases can be offset against consumption tax charged on
sales, and as a result it is expected that the gross margin in the
lubricating oils division will increase in H2 2014. It is expected
that by the end of H2 2014, all purchases of base oils will be made
directly from manufacturers.
Working Capital and Net Cash Flow
Net cash generated from operating activities over the period was
RMB 18.5 million (H1 2013: net cash used in operating activities of
RMB 18.4 million). Despite the rapid increase in sales, the Group
continues to focus on managing its working capital.
During the period financing activities included a capital
contribution and payment of dividend, which were related to the
restructuring carried out in preparation for the Company's
admission to AIM, including buying out of the minority shareholder.
Further details of the restructuring are included in the Company's
admission document dated 28 July 2014 and available for download on
the Company's website, www.gtschemical.com.
Board of Directors
On admission to AIM, the Company significantly strengthened its
Board through the addition of three non executive directors, David
Weir, Derek Welch and Zhi (George) Zeng and myself as non executive
chairman. Together with the executive management, the board today
combines strong experience in chemicals, accountancy, public
markets, corporate governance and Chinese operations.
Investment
In April 2014, the Group invested RMB 4.9 million in an
additional liquid ammonium sulfite and liquid ammonium bisulfite
production line, increasing capacity by 25% from 240,000 tonnes per
year to 300,000 tonnes per year, based on an eight hour shift.
Additional ancillary facilities, including a sulfur warehouse, were
also constructed. Furthermore two of the existing liquid ammonium
sulfite and liquid ammonium sulfite production lines were upgraded
between December 2013 and February 2014, enabling GTS to produce
higher quality chemicals on these lines.
I am also pleased to report the Group has received approval from
the Quality and Technology Supervision of Shandong Province for the
sale of brake fluid, a new product within the lubricant oils
division, and since the end of the period has commenced sales of
this new product.
Discussions with the local Government to acquire a long term
land use right over land adjacent to the Group's existing site has
progressed, and the Directors expect that the acquisition will take
place by the end of 2014. Following the acquisition, the Group
plans to expand its specialty chemicals operations in 2015 on its
existing site and the adjacent land, with the installation of 2
additional liquid ammonium sulfite and bisulfite production lines
and 2 further solid ammonium sulfite production lines. The majority
of the new capacity will be used to satisfy the contract with
Tralin Paper.
Dividend
The Group is committed to its dividend policy of a yield of
approximately 5% per annum, as stated in the Company's AIM
admission document.
Outlook
The outlook for each of our product segments is strong. Growth
in specialty chemicals continues to be underpinned by our contract
with Tralin Paper which itself is continuing with its own expansion
plans. We expect the growth in lubricant oils sales to continue to
rise as we increase our distributor network and brand recognition.
Following the modest growth in recarburizer in the first six months
(as compared to H2 2013), since 30 June we have added a further 5
distributors and expect the benefit of this to be seen in the
second half results.
I would like to thank our Board of Directors, our employees and
our shareholders for their support throughout the period and look
forward to the rest of this year with confidence.
Andrew Harding
Non-Executive Chairman
30 September 2014
Enquiries:
GTS
Mr Roy Su, CFO Tel: +86 159 5935 8899
SP Angel Corporate Finance LLP Tel: +44 (0)20 3463 2260
Nominated Adviser and Broker
David Facey / Stuart Gledhill / Liz Yong
Kreab Gavin Anderson Tel: +44 (0)20 7074 1800
PR Adviser Email: gts@kreab.com
Natalie Biasin / Robert Speed / Renfeng
Zhao
About GTS Chemical Holdings plc
GTS was admitted to AIM on 1 August 2014. GTS is a Jersey
holding company whose sole operating subsidiary Shandong Tiantai
Steel-Plastic Co., Ltd ("Shandong Tiantai"), is the largest Chinese
manufacturer of ammonium sulfite and the second largest producer of
ammonium bisulfite in China. It benefits from access to lower cost
raw materials through the use of low concentration waste products
from nearby industry as well as proximity to key customers which is
of particular benefit due to the degradable nature of ammonium
sulfite. The Group's activities also include blending and
distribution of lubricating oils and trading of recarburizer.
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 JUNE 2014
Note Six months Six months Year ended
ended ended 31 December
30 June 30 June 2013
2014 2013 Pro forma
Unaudited Unaudited
RMB'000 RMB'000 RMB'000
Revenue 5 308,960 177,908 482,860
Cost of sales (245,823) (138,800) (380,437)
------------ ------------ --------------
Gross profit 63,137 39,108 102,423
Selling and distribution expenses (8,121) (2,099) (10,879)
Administrative expenses (5,945) (3,034) (11,486)
Operating profit 49,071 33,975 80,058
Interest on bank deposits 451 215 549
Non-operating income net of expenses - (216) (18)
Finance costs (3,372) (1,599) (4,098)
Profit before tax 46,150 32,375 76,491
Income tax expense 6 (6,930) (4,935) (11,643)
------------ ------------ --------------
Profit for the period 39,220 27,440 64,848
============ ============ ==============
Other comprehensive income - - -
Total comprehensive income for
the period 39,220 27,440 64,848
============ ============ ==============
Profit attributable to
Equity holders of the company 39,220 27,440 64,848
Earnings per share 7
Basic and diluted (RMB) 0.39 0.27 0.65
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2014
Note 30 June 30 June 31 December
2014 2013 2013
Unaudited Unaudited Pro forma
RMB'000 RMB'000 RMB'000
Non-current assets
Property, plant and equipment 8 42,747 28,264 38,094
Intangible assets 9,003 3,783 9,103
Investment in subsidiaries - 950 -
51,750 32,997 47,197
----------- ----------- ------------
Current assets
Inventories 33,498 34,808 31,681
Trade and other receivables 134,033 125,775 132,859
Cash and cash equivalents 80,091 41,717 118,804
----------- ----------- ------------
247,622 202,300 283,344
----------- ----------- ------------
Total assets 299,372 235,297 330,541
=========== =========== ============
Equity and reserves
Share capital 10 10,000 10,000 10,000
Share premium 43,930 43,930 43,930
Merger reserves (6,165) (6,165) (6,165)
Capital reserves 11 51,403 - -
Statutory reserves 1,648 - 1,648
Retained earnings 54,049 88,069 14,829
154,865 135,834 64,242
----------- ----------- ------------
Current liabilities
Bank borrowings 12 74,450 45,450 69,450
Income tax liabilities 4,708 3,669 5,052
Trade and other payables 63,543 50,344 104,597
Dividends payable (net of
tax) - - 87,200
----------- ----------- ------------
142,701 99,463 266,299
Non-current liabilities
Non-interest bearing loans 1,806 - -
1,806 - -
----------- ----------- ------------
Total liabilities 144,507 99,463 266,299
=========== =========== ============
Total equity and liabilities 299,372 235,297 330,541
=========== =========== ============
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2014
Share Share Merger Capital Statutory Retained Total
capital premium reserves reserves reserve earnings equity
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Balance at 1 January
2014 10,000 43,930 (6,165) - 1,648 14,829 64,242
========== ========== =========== =========== ============ ========== ============
Comprehensive income - - - - - 39,220 39,220
Capital contribution - - - 51,403 - - 51,403
---------- ---------- ----------- ----------- ------------ ---------- ------------
Balance at 30 June 2014 10,000 43,930 (6,165) 51,403 1,648 54,049 154,865
========== ========== =========== =========== ============ ========== ============
Balance at 1 January
2013 10,000 43,930 (6,165) - - 60,629 108,394
======= ======= ======== ======= ========
Comprehensive income - - - - - 27,440 27,440
Balance at 30 June 2013 10,000 43,930 (6,165) - - 88,069 135,834
======= ======= ======== ======= ========
Balance at 1 January
2013 10,000 43,930 (6,165) - - 60,629 108,394
======= ======= ======== ====== ========== ==========
Comprehensive income - - - - - 64,848 64,848
Dividends (gross) - - - - - (109,000) (109,000)
Transfer of statutory
reserve - - - - 1,648 (1,648) -
Balance at 31 December
2013 10,000 43,930 (6,165) - 1,648 14,829 64,242
======= ======= ======== ====== ========== ==========
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 JUNE 2014
Six months Six months Year ended
ended 30 ended 31 December
June 2014 30 June 2013
2013
Unaudited Unaudited Pro forma
RMB'000 RMB'000 RMB'000
Profit before tax 46,150 32,375 76,491
Depreciation of property, plant and
equipment 2,212 1,640 3,279
Amortisation of intangible assets 100 43 150
Impairment of non-current assets - - 781
Finance income (451) (215) (549)
Finance costs 3,345 1,543 3,895
Reversal of impairment of non-current
assets - - (1,968)
Loss on disposal of property, plant
and equipment - - 1,968
Operating cash flow before changes
in working capital 51,356 35,386 84,047
(Increase)/Decrease in inventories (1,817) 8,180 11,307
Increase in trade and other receivables (1,174) (56,575) (62,717)
(Decrease)/increase in trade and other
payables (14,961) 2,037 29,006
Net cash generated from/(used in)
operations 33,404 (10,972) 61,643
Interest paid (3,345) (1,543) (3,895)
Income tax paid (11,567) (5,878) (9,519)
------------- ----------- -------------
Net cash generated from/(used in)
operating activities 18,492 (18,393) 48,229
============= =========== =============
Investing activities
Purchase of property, plant and equipment (6,865) (1,747) (14,015)
Expenditure on intangible assets - - (1,627)
Proceeds from disposal of property,
plant and equipment - - 18
Interest received 401 215 549
Net cash (used in)/from investing
activities (6,414) (1,532) (15,075)
============= =========== =============
Financing activities
Proceeds from bank borrowings 44,450 36,450 86,450
Repayment of bank borrowings (39,450) (16,450) (42,450)
Capital contribution 53,209 - 8
Payment of dividend (109,000) - -
Net cash (used in)/from financing
activities (50,791) 20,000 44,008
============= =========== =============
Net increase/(decrease) in cash and
cash equivalents (38,713) 75 77,162
Cash and cash equivalents at beginning
of period 118,804 41,642 41,642
Cash and cash equivalents at end of
period 80,091 41,717 118,804
============= =========== =============
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2014
1 General information
The Company was incorporated in Jersey on 22 January 2014. The
Company's sole operating subsidiary, Shandong Tiantai, a wholly
foreign owned enterprise, was incorporated in China on 16 March
2005.
The address of the registered office is Luzhuang Village,
Jiangdian Town, Gaotang County, Shandong Province. The principal
place of business of the company's operation is same as the
registered office.
The company is a leading enterprise specialising in recycling of
waste ammonia and sulfur generated by energy intensive and
fertilizer plants in China. Its principal activities during the
period were the production of industrial ammonium sulfite and
ammonium bisulfite and production of lubricating oils.
The consolidated condensed financial statements are rounded to
the nearest thousand ('000) and they are presented in Chinese
Renminbi (RMB).
2 Basis of preparation
The condensed financial statements have been prepared in
accordance with International Accounting Standard 34 Interim
Financial Reporting.
Comparative
The comparatives information in the consolidated condensed
financial statements is pro forma. On this basis, the Directors
have decided that it is appropriate to reflect the combination
using merger accounting policies as a group reconstruction under
FRS6 - Acquisitions and mergers in order to give true and fair
view. No fair value adjustments have been made as a result of the
combination.
The consolidated condensed financial statements incorporate the
financial statements of the Company and entities controlled by the
Company (its subsidiaries). Control is achieved where the Company
has the power to govern the financial and operating policies of an
entity so as to obtain benefits from its activities.
All intra-group transactions, balances, income and expenses are
eliminated in full on consolidation.
Merger accounting
The Group has been formed in stages since 25 October 2013, when
Runtai Environment Protection International Limited ("Hong Kong
Runtai"), a company incorporated in Hong Kong, acquired the entire
share capital of Shandong Tiantai from its shareholders for a total
cash consideration of RMB53,918,900. As a result of this, Shandong
Tiantai become a wholly owned subsidiary of Hong Kong Runtai. The
Company then acquired the shares of Hong Kong Runtai on 29 March
2014 by way of shares exchange.
Therefore, although the Group reconstruction did not become
unconditional until 29 March 2014, these consolidated condensed
financial statements are presented as if the Group structure has
always been in place, including the activity from incorporation of
the group's principal trading subsidiary. All entities had the same
management as well as majority shareholders.
The interim report was approved by the Board of Directors on 29
September 2014. The report is unaudited and does not constitute the
company's statutory accounts for the six months ended 30 June
2014.
3 Significant accounting policies
These financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRS") issued by the
International Accounting Standard Board (IASB) and interpretations
of the International Financial Reporting Interpretations Committee
(IFRIC), as adopted by European Union.
From the beginning of the reporting period the Company has
adopted all relevant standards effective for accounting periods
beginning on or after 1 January 2014.
4 Seasonality of interim operation
Traditionally and historically, the first quarter of the year is
quiet due to the festive season in China. Due to this, the sales in
the second half year are normally higher than the first half
year.
5 Segment information
The sales revenue arises from the sale of ammonium sulfite,
ammonium bisulfite, lubricant oils (including cutting oil) and
recarburizer. All the activities are within China.
Analysis of revenue from the sale of goods and services are
analysed as follows:
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2013
2014 2013 Pro forma
Unaudited Unaudited
RMB'000 RMB'000 RMB'000
Solid ammonium sulfite 130,384 135,882 263,148
Liquid ammonium sulfite 54,610 15,113 65,427
Liquid ammonium bisulfite 29,192 26,913 76,654
Recarburizer 31,963 - 30,620
Lubricant Oils 62,811 - 47,011
308,960 177,908 482,860
=========== =========== =============
6 Taxation
The Company is regarded as resident for tax purposes in Jersey
and on the basis that the company is neither a financial services
company nor a utility company for the purposes of the Income Tax
(Jersey) Law 1961, as amended; the company is subject to income tax
in Jersey at a rate of zero per cent.
Hong Kong Runtai, an intermediate parent company is regarded as
resident for tax purposes in Hong Kong.
The Group's operating subsidiary in China is subject to income
tax rate at 25%. Due to its high technology enterprise status, the
subsidiary is entitled to a reduced rate of 15% until 31 December
2019.
7 Earnings per share
Earnings per share are calculated by dividing the earnings
attributable to equity shareholders of the company as at 30 June
2014.
Six Six months
months ended
ended 30 30 June
June 2014 2013
Unaudited Unaudited
RMB RMB
Earnings
Earnings for the purposes of basic and diluted
earnings per share being net profit attributable
to equity holders of the parent 39,220,067 27,440,200
============= =============
Number Number
Number of shares
Weighted average number of ordinary shares
for the purpose of basic earnings per share 100,000,000 100,000,000
============== ==============
There is no dilutive effect on earnings per share.
8 Property, plant and equipment
During the period, the company has built up one new production
line for liquid ammonium sulfite and liquid ammonium bisulfite. Two
existing production lines were upgraded between December 2013 and
February 2014 to enable production of higher quality chemicals. The
addition during the period was RMB6.9 million (June 2013: RMB1.7
million).
9 Subsidiaries
Details of the Company's subsidiaries at 30 June 2014 are as
follows.
Place of Proportion
incorporation of ownership Principal activities
Name of and operation interest
subsidiary %
Runtai Environment Hong Kong 100 Holding company
Protection International
Limited
Shandong Tiantai China 100 Manufacturing and
Steel-Plastic Co., distribution of ammonium
Limited sulfite, ammonium
bisulfite and lubricant
oils
10 Share capital
On incorporation, 94 ordinary shares of GBP1 each and 6 ordinary
shares of GBP1 each were issued fully paid to Trident Nominees
Limited and Xenith Trust Company Limited respectively as the
subscribers to the Memorandum of Association.
On 22 January 2014, Trident Nominees Limited and Xenith Trust
Company Limited transferred 94 ordinary shares of GBP1 each and 6
ordinary shares of GBP1 each to SinoEuro Runtai Environmental
Protection Resource Co., Ltd. ("SinoEuro Runtai"), and Bright
Fortune Global Finance Co., Ltd. ("Bright Fortune")
respectively.
On 29 March 2014 SinoEuro Runtai and Bright Fortune, as the
shareholders of Hong Kong Runtai, entered into a share exchange
agreement with the Company, pursuant to which each of SinoEuro
Runtai and Bright Fortune transferred all of their shareholdings in
Hong Kong Runtai to the Company. The consideration for the sale and
purchase of the shares was the issue and allotment to the sellers
of 1,000 ordinary shares of GBP1.00 each in the capital of the
Company pro rata to their shareholdings in Hong Kong Runtai.
On 16 April 2014, the Company, by a written resolution of all of
its shareholders (i) reduced the authorised but unissued share
capital of the Company from GBP5,000,000 to GBP2,500,000, (ii)
carried out a sub-division of the entire issued share capital of
2,500,000 ordinary shares of GBP1.00 each into 250,000,000 Ordinary
Shares of GBP0.01 each and (iii) adopted the new Memorandum.
Prior to the period, in preparation for the Company's
application for admission to trading on AIM, the Group underwent a
number of restructuring activities, including, on 30 September
2013, the issue of a loan (the "Shareholders Loan") of an aggregate
sum of USD 8,829,905 from SinoEuro Runtai and Bright Fortune to
Hong Kong Runtai. Subsequent to this, on 16 April 2014, the
obligation to repay the Shareholders Loan was novated from Hong
Kong Runtai to the Company pursuant to a novation agreement, and by
resolutions of the Board, on 16 April 2014 the Board approved the
issue and allotment of 99,890,000 Ordinary Shares in aggregate to
SinoEuro Runtai and Bright Fortune in settlement of the
Shareholders Loan.
The total issued number of ordinary shares by the end of the
reporting period is 100,000,000 at GBP0.01 per share.
The exchange rate used for the issued shares is GBP1: RMB10.
11 Capital Reserves
The initial amount of the capital contribution reserve was the
difference between the proceeds of the loan received from Ms Li
Guiping on 21 February 2014, and the amount of that loan measured
at amortised cost using the effective interest method ("the
discount"). An amount equal to the interest expense on the loan
that will be recognised in the profit and loss account in the year
is transferred from the capital contribution reserve to retained
earnings annually. The amount of the capital contribution reserve
will therefore equal the unamortised discount on the loan
throughout the life of the loan (50 years). The net effect of the
loan and its eventual repayment on retained earnings will be nil in
each period and cumulatively.
12 Borrowings and notes payable
During the period, short term borrowings increased by RMB5
million while the notes payable decreased by RMB17.3 million. The
average interest rate is 9.8%.
The short term bank borrowings are secured by:
- guarantee provided by Liaocheng Youjia Sewing Machinery Co;
- guarantee provided by Shandong Lingtong Heavy Machinery Co;
- guarantee provided by Gaotang Minshun Cotton Co;
- guarantee provided by Shandong Enterpprise Credit Guarantee Co;
- guarantee provided by Gaotang Hengxin Machinery Co;
- guarantee provided by Gaotang Botai Packaging Material Co;
- guarantee provided by Gaotang Huihuang Electronic Technology Co. Ltd;
- guarantee provided by Shandong Tianfang Biotechnology Co. Ltd;
- guarantee provided by Gaotang Lida Construction Material Co. Ltd;
- personal guarantee from Li Gui Ping (director of Hong Kong Runtai and Shandong Tiantai);
- personal guarantee from Liu Cheng (CEO of the Company and spouse of Li Gui Ping);
- personal guarantee from Guo Cui Cui (supervisor of Shandong Tiantai); and
- personal guarantee from Wang Jinqi (spouse of Guo Cui Cui).
13 Related party transactions
During the period, Shandong Tiantai purchased raw materials of
RMB63 million (June 2013: RMB12 million) from Beijing Shizhu Co, a
company controlled by Liang Jin Ping, who was a key management
personnel of Shandong Tiantai. At the end of the period, the amount
owed to Beijing Shizhu Co was RMB6.2 million (June 2013: RMB30.8
million).
At the end of the period, Shandong Tiantai owed RMB1.9 million
(June 2013: RMB8K) to Li Guiping, a director of Hong Kong Runtai
and Shandong Tiantai who is the spouse of Cheng Liu, the CEO of the
group.
14 Events after the reporting date
Related party transactions
Due to Chinese foreign exchange restrictions, instead of taking
part in the Placing, Cosmic Dawn Limited and Lofty Ambitious
Limited acquired a total of 5,800,000 Existing Ordinary Shares from
SinoEuro Runtai, a company wholly owned by Mr Cheng Liu, CEO of the
Company, for an aggregate consideration of GBP2,320,000. Following
these transactions on 15 July 2014, Cheng Liu agreed to lend an
amount approximately equal to the proceeds of the sales, being the
sum of RMB 24,267,200 to Shandong Tiantai (the "Equity Loan"). On
17 July 2014, the Equity Loan of RMB 24,267,200 was drawn down in
full by Shandong Tiantai. The Equity Loan is repayable ten years
from the date of the agreement and accrues interest at a rate of 3
per cent. per annum, payable annually in arrears.
Admission to AIM
On 1 August 2014, the company was admitted to AIM London Stock
Exchange. On admission, 2,313,056 Placing shares were issued
pursuant to the Placing and the total number of shares has
increased to 102,313,056 at GBP0.01 per share. The issued price of
the Placing Shares was GBP0.36 per share which represents a premium
of GBP0.35 over their nominal value.
Appointment of Non Executive Directors
The company has appointed the following non executive directors
effective from the date of admission:
-- Andrew Harding - Non Executive Chairman
-- David Weir - Senior Non Executive Director
-- Derek Welch - Non Executive Director
-- Zhi (George) Zeng - Non Executive Director
Share Option Scheme
On admission, Options were outstanding under the Share Option
Scheme to subscribe for 804,888 new Ordinary Shares (equal to
approximately 0.8 per cent of the Enlarged Share Capital) at an
exercise price of GBP0.36 per share (being equal to the Placing
Price). These Options were granted on 11 June 2014 and are
exercisable in whole from the second anniversary of the date of the
grant and on a change of control or winding up of the Company.
These Options were granted to the newly appointed non-executive
directors, Andrew Harding, David Weir, Derek Welch and Zhi (George)
Zeng at 201,222 shares each.
Employee Conditional Share Transfer Agreements
SinoEuro Runtai has entered into conditional agreements with
each of five employees of Shandong Tiantai under which SinoEuro
Runtai has granted to each of the five employees an option to
purchase from it 3,000,000 Ordinary Shares at a price of RMB 1
(being equivalent to GBP0.10). The Ordinary Shares can be acquired
by the employee at any time from the first anniversary of Admission
to the date which is six months following. An aggregate of
15,000,000 of the Ordinary Shares held by SinoEuro Runtai are
subject to Employee Conditional Share Transfer Agreements. Ms
Xueying Zhang, a Director of the Company, is party to an Employee
Conditional Share Transfer Agreement pursuant to which she may
acquire 3,000,000 Ordinary Shares.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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