Sunshine Agri-Tech Inc.
TSX VENTURE : SAI
VANCOUVER, July 10, 2019 /CNW/ - Sunshine Agri-Tech Inc. (TSX VENTURE: SAI) ("Sunshine Agri-Tech" or the "Company") reports that the wholly-owned subsidiary of the Company in Hong Kong, Sunscape (Hong Kong) Limited ("Sunscape HK"), and the wholly-owned subsidiary of Sunscape HK in China, Dalian Sunshine Agri-Tech Co., Ltd. ("Dalian Sunshine"), entered into the following transactions:
1. Disposition of Changchun Sunshine Bio-Feed Co., Ltd. ("Changchun Sunshine")
Pursuant to a share transfer agreement (the "Changchun Sunshine Agreement") dated June 19, 2018, Dalian Sunshine has sold all the shares in the capital of Changchun Sunshine to Jilin Province Wister Environmental Protection Science and Technology Co., Ltd. for a price of RMB8,200,000 Yuan (approximately $1,583,514).
The purchase price under the Changchun Sunshine Agreement was determined based on a valuation report dated June 15, 2018 issued by a valuation and appraisal firm located in Changchun City, China. Such valuation report concluded that the value of net assets of Changchun Sunshine were worth RMB7,858,030.45 (approximately $1,505,370) on the base day as of May 31, 2018.
2. Disposition of 51% interest in Changchun Grain Bio-Feed Co., Ltd. ("Changchun Grain")
Dalian Sunshine held 51% interest in Changchun Grain and the other 49% was owned by Dalian Anhe Investment Management Centre ("Dalian Anhe"), an arm's length party of the Company.
Dalian Sunshine entered into two agreements (collectively, the "Changchun Grain Agreements") dated September 30, 2018 to sell its 51% interest in Changchun Grain:
(a) Pursuant to a share transfer agreement, Dalian Sunshine has agreed to sell a 21% equity interest in Changchun Grain to Dalian Anhe for a consideration of RMB2,100,000 Yuan (approximately $416,430); and
(b) Pursuant to a share transfer agreement, Dalian Sunshine has agreed to sell the remaining 30% equity interest held by it in Changchun Grain to Nonpaike Bio-Tech (Dalian) Co., Ltd. ("Nonpaike") for a consideration of RMB1,600,000 Yuan (approximately $317,280).
The purchase prices under the Changchun Grain Agreements were based on an independent valuation report prepared by Evans & Evans Inc., which concluded that the fair market value of Changchun Grain was in the range of CAD$960,000 to $1,140,000 as at the valuation date of August 31, 2018. Accordingly, the 51% interest owned by Dalian Sunshine in Changchun Grain had the fair market value ranging from CAD$489,600 to $581,400.
3. Inter-Company Reorganization
An inter-company asset transfer agreement dated November 28, 2018 was entered into between Dalian Sunshine and Sino-Grain Bio-Tech (Dalian) Co., Ltd. ("Sino-Grain"), pursuant to which Dalian Sunshine has transferred to Sino Grain all of the assets, business, operation-related liabilities and employees in respect of manufacturing of, and research on, the livestock feed additives (the "Continued Business") for a price of RMB4,605,794 Yuan (approximately $913,329).
Sino Grain is an indirect wholly-owned subsidiary of Sunscape HK and carries on the Continued Business since then.
4. Disposition of Dalian Sunshine
Following the inter-company reorganization as described above, a share transfer agreement dated December 25, 2018 was entered into between Sunscape HK and Nongpaike, pursuant to which Sunscape HK has agreed to sell all of the shares in the capital of Dalian Sunshine to Nonpaike for a price of RMB 4,500,000 (approximately $892,350).
The dispositions of 100% interest in Changchun Sunshine, 51% interest in Changchun Grain and 100% interest in Dalian Sunshine as described above (collectively, the "Disposition Transactions") were the results of negotiations with arm's length parties. As the date hereof, the Disposition Transactions have received conditional acceptance of the TSX Venture Exchange (the "Exchange"). They are, however, still subject to the ratification and approval of the shareholders of Sunshine Agri-Tech and final acceptance of the Exchange.
The Company has called an Annual General and Special Meeting of its shareholders (the "Meeting") to consider and approve, among other things, the Disposition Transactions. The Company has mailed its Notice of Meeting, Information Circular and Proxy (the "AGM Package") for the Meeting to be held on July 31, 2019 at 10:00 a.m. Pacific time, at 2900 - 550 Burrard Street, Vancouver, British Columbia, Canada V6C 0A3.
The AGM Package has posted on SEDAR (www.sedar.com). Shareholders are urged to download a copy from SEDAR, if not already received by mail, and to vote in favour of the special resolution contained therein. The Disposition Transactions will not be approved, ratified or confirmed without the affirmative vote of at least two-thirds of the votes cast by the Company's shareholders who vote in person or by proxy on the special resolution at the Meeting.
The board of directors of the Company unanimously recommends that shareholders vote in favour of the special resolution contained in the AMG Package.
About Sunshine Agri-Tech Inc.:
Sunshine Agri-Tech Inc. is a public company listed on the TSX Venture Exchange. It is currently engaged in the research, development, production and sales of microbial feed additives and related products that aim to improve the health and performance of animals. The Company is based in the city of Dalian in the People's Republic of China.
On Behalf of the Board of Directors
SUNSHINE AGRI-TECH INC.
Baojun Zhang, PhD
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Sunshine Agri-Tech Inc.
For further information: Sunshine Agri-Tech Inc. Xiaozhu Pang, Chief Financial Officer Tel: 778.865.2296