TIDMCFC

RNS Number : 9788I

China Food Company PLC

01 August 2012

 
   Press Release     1 August 2012

China Food Company Plc

("China Food" the "Company" or the "Group")

Update on Sale of Fuss Feed

China Food Company plc (AIM: CFC), a leading Chinese manufacturer of cooking and dipping sauces, is pleased to give the following update on the sale of the Group's animal feed business. This follows the announcement made on 18 July 2012 relating to the Company's 100% subsidiary, Full Fortune Holdings Pte Ltd, entering into an agreement with Wisehand Planning Co., Ltd ("Wisehand" or the "Buyer") to dispose of the Group's animal feed business (the "Disposal"), for a total consideration of US$16 million. The Group is pleased to announce that the Buyer has unconditionally agreed to proceed with the First Completion and the Transaction, and the first payment of US$4.5 million is now expected by mid August 2012 due to unexpected regulatory delays on the part of the Buyer.

The timing of the remaining payments is subject to other milestones, including the completion of the land sale and the completion of the new factory, but it is expected that US$3.5 million will be paid in autumn 2012 and the remaining US$8.0 million will be paid by the end of the year. The Disposal is expected to result in a one-off gain of approximately GBP4.8 million.

- Ends -

For further information:

 
 China Food Company Plc 
 John McLean, Non-Executive Chairman        Tel: +44 (0) 7768 031 
                                                              454 
 Raphael Tham Wai Mun, Chief Executive 
                                         www.chinafoodcompany.com 
 Numis 
 David Poutney - Head of Corporate           Tel: +44 (0) 20 7260 
  Broking                                                    1000 
 finnCap (Nomad) 
 Geoff Nash / Ben Thompson (Corporate        Tel: +44 (0) 20 7220 
  Finance)                                                   0500 
 Simon Starr (Broking)

Media enquiries:

 
 Abchurch Communications 
 Joanne Shears / Oliver Baxendale     Tel: +44 (0) 20 7398 
                                                      7709 
 joanne.shears@abchurch-group.com   www.abchurch-group.com

Notes to Editors:

China Food Company, based in Shandong province in the People's Republic of China, a region with a population of circa 95 million, operates a group of well-established food manufacturing businesses producing a range of cooking and dipping sauces. China Food has a very strong brand for cooking and dipping sauces which are sold through a network of distributors and outlets of supermarket chains such as Tesco, Wal Mart, Carrefour and Jialejia in Shandong and surrounding provinces in Northern China. China Food is expected to benefit also from the growth of international supermarket chains in China. The Group recently launched 'Xaka', its premium soya sauce product, which has been well received by the market.

The Chinese sauces, dressings and condiments market is growing significantly, driven by Chinese population growth and economic prosperity. The Chinese domestic market is rapidly expanding, and the Group is well positioned to benefit from China's demographic growth and increased urbanisation, having invested in a new factory which increases China Food's capacity to 50,000 tonnes of soya sauce using processes which comply with domestic and international manufacturing and food safety standards. The Group's strategy is to become a leader in premium soya sauce in Northern China and to capitalise on the rapid growth in the increasingly discerning consumer market.

The Group's operations are highly scalable and able to support further growth, and with net assets of GBP39 million (as at 31 December 2011), the prospects for China Food are strong.

Further information on China Food Company can be found at www.chinafoodcompany.com.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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