KUALA LUMPUR: Xidelang Holdings Ltd
(XDL), which designs and sells sports and leisure apparels, plans to venture into apparel manufacturing.
The company, which also makes sports and leisure shoes, told Bursa Malaysia that it had signed a heads of agreement with Jinjiang YangSen Garments Co Ltd to acquire the latter’s existing business and undertakings, including all of its assets and certain agreed liabilities.
Based in Quanzhou, Fujian Province, Jinjiang YangSen designs, manufactures, distributes and markets apparels on an original design manufacturing basis for internationally-recognised brands such as Primark, Mizuno, Joma, Killtec, NewYorker and Admiral. The apparels are distributed to international markets including the United States, Europe, UK, Turkey and Brazil.
XDL said the proposed acquisition was subject to a legal, financial and commercial due diligence to be conducted by XDL in respect of Jinjiang Yangsen’s assets, intellectual properties, contracts, distribution network, business and certain agreed liabilities.
XDL did not give an estimated purchase price but said it proposed to satisfy the purchase consideration via cash and/or issuance and allotment of new ordinary shares of 3 US cents each in XDL at the issue price of 22 sen per share.
The parties will enter into a definitive agreement within three months from the date of the HOA (July 29), subject to the parties’ mutual agreement in writing to extend the HOA cut-off date.
As the contribution from the manufacture of apparels may potentially exceed 25% of the net profits of XDL, the board proposes to seek the prior approval from the shareholders of XDL at a special general meeting.
XDL shares, which have risen nearly 70% since early June, closed half a sen higher on Wednesday to 17.5 sen.