TIDMLED
RNS Number : 3089O
LED International Holdings Ltd
08 February 2016
8 February 2016
LED International Holdings Limited
("LED" or the "Company")
Corporate Update
The board of directors of LED (the "Board") today provide the
following update for the Company's shareholders (the
"Shareholders").
Cessation of the conditional agreement with the shareholders of
Shenzhen Ruihetai Industry Co. Limited ("RHT")
On 31 March 2015 the Company announced that it had decided to
form a new joint venture with the shareholders of RHT. The Company
now announces that it has ceased negotiations aimed at establishing
the said joint venture for a new distribution business. Upon
further discussions with the Company's People's Republic of China
("PRC") lawyers and the shareholders of RHT, it was concluded that
the proposed joint venture did not achieve the original goals of
the parties. The Company has sent a termination notice to the
shareholders of RHT in respect of all agreements executed as part
of LED's negotiations.
Annual report and accounts
Further to the Company's announcement of 22 December 2015, the
Company announces that it is seeking to publish its audited report
and accounts for the year ended 30 June 2015 during the second
quarter of 2016. The delay is primarily due to the fact that the
first quarter is a peak season for audit firms in Hong Kong.
The Company's independent auditor issued a series of disclaimers
of opinion on the consolidated financial statements for the year
ended 30 June 2014. Where possible, the Board will work with its
independent auditor to seek to resolve and thereby remove certain
of these disclaimers of opinion from the Company's consolidated
financial statements for the year ended 30 June 2015.
The Company's ordinary shares (the "Shares") were suspended from
trading on AIM on 22 December 2015, pursuant to AIM Rule 19. The
suspension will remain in place until, inter alia, the Company's
audited report and accounts for the year ended 30 June 2015 have
been published and posted to Shareholders.
PRC economic outlook and current trading and prospects
Trading conditions within LED's markets in the PRC remain
challenging.
LED has experienced difficulties and delays in collecting
receivables from certain of its customers. The Company is in
dialogue with these customers and hopes that LED's receivables
position can be improved during 2016. However, as a result of the
above, the Company's working capital position is constrained.
Given the uncertainty regarding the energy management and
equipment leasing markets in the PRC, the issues with the
collection of receivables and the general trading outlook of
certain areas of LED's business, the Board continues to examine
opportunities for the development of its business. This could
potentially involve acquisitions, joint-ventures or other new
business opportunities.
Given the constraints of the Company's working capital position,
it is likely that LED will also seek to raise finance in the short
to medium-term future, which could be via a new issue of equity
and/or debt, and/or via the restructuring of the Company's existing
debt facilities.
Update on Shenzhen Lamp Energy Management Investment Company
Limited
On 25 March 2013 LED announced the acquisition of Shenzhen Lamp
Energy Management Investment Company Limited (subsequently renamed
to Shenzhen Green Pearl Energy Management Services Company Limited
("GPEMCO")). This acquisition was structured as a direct
acquisition of GPEMCO's immediate parent company, Shenzhen Green
Pearl Energy Management Technology Development Company Limited
("Shenzhen GP Energy"), by the Company's 60% subsidiary, Green
Pearl Energy Conservation Holdings Limited ("GP Energy Holdings")
(the "Acquisition").
The Acquisition has been restructured in such a way such that GP
Energy Holdings had set up Carten International Limited, a wholly
owned subsidiary in Hong Kong, as an investment company to acquire
Shenzhen GP Energy, which will subsequently be restructured and
transformed from a domestic PRC company to a Wholly Foreign Owned
Enterprise ("WFOE") under the laws of the PRC.
GP Energy Holdings signed the relevant acquisition agreement
with Mr. So Hing Chung (the "Acquisition Agreement") on 21 March
2013. One of the terms of the Acquisition Agreement is that the
business and assets, including patents and intellectual property
rights, inventories and energy management contracts of Strongbase
New Opto-Electronics Technology Company Limited (a former
subsidiary of the Company, the disposal of which was announced on
25 March 2013) (together the "Assets") be transferred to
GPEMCO.
As at the date of this announcement, the Acquisition has yet to
be fully completed as the Company is in the process of obtaining
consent from the PRC government for the transformation of Shenzhen
GP Energy into a WFOE. Despite the delay, the Company retains
control over and safeguards the Assets by exercising management
control over GPEMCO.
The Board expects that the Acquisition and the related
transactions will be completed in the middle of 2016.
Further announcements will be made in due course.
**Ends**
For further information:
LED International Holdings Limited
Stephen Chan - Chief Executive Officer +852 2243 3100
Allenby Capital Limited
Nick Naylor/John Depasquale/Alex Brearley +44 (0) 20 3328 5656
Notes to Editors:
LED International Holdings Limited and its subsidiaries
specialize in the provision of EMC contracts under which the group
(the "Group") installs energy saving products in its customers'
premises, including lighting and reactance filtering equipment
supplied by the Group, and the subsequent savings made by the
customers in their electricity charges are then shared between the
Group and the customers thereby enabling the Group to generate
recurring revenue rather than one-off sales revenue. Historically,
the Group's business has been the development, manufacture and sale
of low-powered light-emitting diode ("LED") display screens and
modules.
Under EMC contracts, the Group provides energy efficiency
solutions, including LED lighting, reactance filtering energy
saving and other energy efficiency solutions. Specifically, the
Group overhauls its customers' existing lighting and power
consumption systems (which are based on traditional lighting
technology and power generation equipment) with proprietary LED
lighting products, reactance filtering equipment and other
solutions provided by the Group. These energy efficiency products
are installed in customers' premises. The Group bears all the
upfront costs associated with the supply and installation of the
energy efficiency solutions and these costs are then recouped by
sharing in the monthly energy savings generated by the customers'
use of the energy efficiency solutions over the period of the
contracts. The Group receives revenue from customers on several
different payment terms including on a pre-payment, monthly or
quarterly basis.
For more information, please visit: http://www.led-intl.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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