Hebei Sanyuan, CAG agree on split of Sanlu assets

(Xinhua)
Updated: 2009-11-20 14:17

BEIJING: Beijing Capital Agribusiness Group (CAG) has agreed to pay 58.5 million yuan (US$8.6 million) for the non-performing assets of the Sanlu Group, which was bankrupted in last year's melamine contamination scandal.

CAG and Hebei Sanyuan Foods Co. -- respectively the parent and subsidiary of the Shanghai-listed Beijing Sanyuan Foods Co. -- jointly bid 616.5 million yuan for the core assets of Sanlu in March.

Under an agreement, Hebei Sanyuan was to pay for Sanlu assets after Beijing Sanyuan Foods got government approval to raise funds for assets purchase by private share-issues.

CAG, then known as Beijing Sanyuan Group Co., was to take over any flawed assets or debt related to the assets incurred before the actual payment.

Hebei Sanyuan had found some Sanlu assets were defective or impaired after the bid, which could lead to malfunctions, Beijing Sanyuan Foods said in a statement to the Shanghai Stock Exchange Friday.

Hebei Sanyuan Foods has agreed to pay 558 million yuan (US$81.7 million) for the remaining assets.

The Sanlu assets auctioned in March included land use rights, manufacturing equipment and a 98.8-percent stake in a dairy producer in Xinxiang city, Henan Province.

Beijing Sanyuan Foods said Tuesday that it had raised up to 1 billion yuan by issuing shares to its parent company CAG.