CEVO China Evoline

 

TIDMCEVO 
 
RNS Number : 2626C 
China Evoline PLC 
10 November 2009 
 

China Evoline plc 
("China Evoline" or the "Company") 
 
 
10 November 2009 
 
Loan Ageement and Related Party Transaction 
 
 
China Evoline plc ("China Evoline" or the "Company") announces that it has 
today entered into a loan agreement with its substantial shareholder, Staybest 
Limited ("Staybest"). 
 
 
Under the loan agreement, Staybest has agreed to make a GBP160,000 drawdown loan 
facility available to the Company to fund its working capital requirements. 
Funds will be made available to the Company in two tranches with the first 
tranche of GBP80,000 being available immediately. The balance shall be available 
for drawdown on the date that is six months after the date of the loan 
agreement. 
 
 
Interest at a rate of 2.5% per annum will be charged on the principal amount of 
the loan from the date of drawdown and the Company will pay the amount of 
interest accrued on the principal amount of the loan on the repayment date (the 
earliest date for repayment of the loan being the date that is 16 months after 
the date of the loan agreement). 
 
 
As the loan agreement that has been entered into by the Company is classified as 
a related party transaction under the AIM Rules, the directors of the Company 
consider, having consulted with the Company's Nominated Adviser, Fairfax I.S. 
PLC, that the terms of the loan agreement with Staybest are fair and reasonable 
insofar as the Company's shareholders are concerned. 
 
 
Frank Lewis, Chairman of China Evoline stated: 
 
 
"We are delighted that Staybest continues to show its support for the Company by 
making a loan available to it. The additional working capital will enable the 
Company to progress with the implementation of its investing strategy." 
 
 
The Investing strategy of the Company is set out below. 
 
 
Contact: 
 
 
China Evoline plc 
Frank Lewis, Chairman 
07775 504 313 
 
 
Fairfax I.S. PLC 
Ewan Leggat/Laura Littley 
0207 598 5368 
 
 
Investing Strategy 
 
 
The strategy of the Directors is for the Company to invest in one or more 
companies established in the Asia Pacific region, but which have a significant 
focus on the PRC (assets, customers or suppliers) and have the need for capital 
prior to them achieving a flotation on the public markets, either within or 
outside the PRC, or achieving a trade sale in due course. Such companies will be 
sourced largely through the contacts of the Directors, and any funding required 
by the Company to make such an investment will be raised prior thereto. While 
the Company is not currently able to identify the specific types of businesses 
which it might invest in, it is more likely than not that the sectors which will 
be targeted will be resources, technology and property - all areas where the 
Directors have existing knowledge and contacts. 
 
 
The Board believes that the Directors have relevant experience in identifying, 
assessing, and negotiating such acquisitions. The Directors believe that their 
broad collective experience in acquisitions, accounting, corporate and financial 
management together with their wide industry contacts will enable the Company to 
achieve its objectives. Investment propositions will be considered when the 
Directors consider that enhanced values may be achieved. A particular 
consideration will be to identify investments where the Directors believe that 
their expertise and experience can be deployed to facilitate growth or unlock 
value. There is no limit to the number of projects in which the Company may 
invest. The Directors may consider investing in a company which is geared when 
they believe such gearing is appropriate. 
 
 
The Directors will conduct initial due diligence appraisals of potential 
projects and where they believe further investigation is warranted they will 
appoint suitably qualified, and where appropriate independent persons to conduct 
further due diligence. 
 
 
The Company, as currently proposed, is unlikely to have sufficient cash 
resources to expend in undertaking due diligence on any potential projects. In 
the event that a suitable project is identified, the Company would either seek 
to raise further funds in order to finance any due diligence and acquisition 
costs or seek to pass on the costs to a third party, possibly in return for a 
success-related fee payable in shares or in cash. Staybest Limited and Wellhigh 
Limited (existing investors in the Company) have indicated that they would be 
willing to participate in the funding of such costs. 
 
 
The Directors intend to take an active role in assessing and management of any 
investment that the Company may make. Accordingly, the Company is likely to seek 
participation in the board of directors of any company which the Company 
acquires with a view to improving its performance and using of its assets in 
such ways as should result in an increase in the value of such a company. The 
Directors hope that the resulting benefit would provide a satisfactory return to 
the Company's Shareholders. The Directors may consider borrowing in respect of 
such investments if such funding was available and deemed appropriate by the 
Directors at that time. 
 
 
In the event no substantial acquisition is made within 12 months of the date of 
the 2009 AGM, namely 21 April 2010, in accordance with the AIM Rules for 
Companies, trading in the Company's shares will be suspended and if no reverse 
transaction is achieved in the following 6 months, the London Stock Exchange 
will cancel the admission of the shares. 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 AGRUROKRKVRAARA 
 

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