China Dongxiang Co. Ltd. (03818.HK) is teaming up with its chairman Chen Yihong to buy 90 percent stake in a yacht bay facility in the US state of Washington, in a deal worth US$26.1 million.
The sportswear supplier will hold 55-percent interest in a joint venture company, Boundary Bay, that will be set up to operate the facility, according to the Hong Kong Economic Journal.
An independent third party, Mengfa, will hold 10 percent stake in the venture, which will be engaged in operation, management and development of sports-related travel businesses.
Dongxiang’s management stressed that the acquisition will offer synergy with the firm’s existing sports apparel businesses, while also building value through US dollar-denominated assets.
The yacht bay comes with undeveloped land parcels of about 10.6 hectares nearby.
Chen has committed to buy out the 55-percent stake of Dongxiang if the joint venture brings a significant loss to the listed firm.
Analysts are cautious about the acquisition given its overseas location and Dongxiang’s disappointing track record in executing newly acquired projects, HKEJ noted.
Translation by Vey Wong
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