Singapore-listed investment company Rowsley Limited will acquire a Chinese-based solar firm, Perfect Field Investment, for S$2.7 billion.
The deal will lead to reverse takeover of Rowsley by Perfect Field, which is controlled by Chinese scientist Dr Ma Xin.
Perfect Field makes solar energy products.
The transaction is believed to be among the largest reverse takeover deals in Singapore so far.
Under the deal, Rowsley will issue 18 billion new shares at 15 cents each to Dr Ma and his investment vehicle Totalpro Group, representing 92 percent of the company's enlarged capital.
In return, Perfect Field is guaranteeing that it will achieve a net profit of at least $300 million for each of the financial years ending 30 June 2008, 2009 and 2010.
This represents a forecast price-earnings ratio of about 9 times based on the purchase price.
As a condition of the deal, Rowsley has to obtain additional funding of no less than $150 million to meet the expansion needs of the Perfect Field Group.
When the acquisition is completed in about 6 to 9 months, Rowsley will place out new shares to meet a Singapore Exchange free float requirement of 12 percent of the paid-up capital.
The placement price is still to be fixed.
Rowsley will be solely involved in the solar energy business after the reverse takeover is completed.
The acquisition is subject to approval by shareholders and the Singapore Exchange.
In Wednesday trade, Rowsley shares rose 6.8 percent to 31.5 cents.
The deal will lead to reverse takeover of Rowsley by Perfect Field, which is controlled by Chinese scientist Dr Ma Xin.
Perfect Field makes solar energy products.
The transaction is believed to be among the largest reverse takeover deals in Singapore so far.
Under the deal, Rowsley will issue 18 billion new shares at 15 cents each to Dr Ma and his investment vehicle Totalpro Group, representing 92 percent of the company's enlarged capital.
In return, Perfect Field is guaranteeing that it will achieve a net profit of at least $300 million for each of the financial years ending 30 June 2008, 2009 and 2010.
This represents a forecast price-earnings ratio of about 9 times based on the purchase price.
As a condition of the deal, Rowsley has to obtain additional funding of no less than $150 million to meet the expansion needs of the Perfect Field Group.
When the acquisition is completed in about 6 to 9 months, Rowsley will place out new shares to meet a Singapore Exchange free float requirement of 12 percent of the paid-up capital.
The placement price is still to be fixed.
Rowsley will be solely involved in the solar energy business after the reverse takeover is completed.
The acquisition is subject to approval by shareholders and the Singapore Exchange.
In Wednesday trade, Rowsley shares rose 6.8 percent to 31.5 cents.
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