San Diego-based blank check company InterAmerican Acquisition Group Inc. (IAG) announced on May 21, 2008 that it has entered into an agreement to acquire up to 89.6% of the capital stock of the holding company Sing Kung, Ltd., registered in the British Virgin Islands. IAG will also complete an exchange offer to acquire the balance at the closing of the acquisition.
BVI-registered Sing Kung, through its wholly-owned China-based subsidiary, Century City Infrastructure Co. Ltd. is planning and implementing urban projects for municipal and provincial governments in China. It is important that the Chinese infrastructure and development market is growing rapidly, exceeding annual level of $100 billion, and it is estimated that this market will rise faster than GDP for several decades. The management of BVI-based Century City has defined its market as the 800 largest municipal and provincial governments that are responsible for meeting these significant needs of urban infrastructure.
By terms of the agreement, no cash consideration will be paid to management or any existing shareholders of the BVI-registered company. To meet the immediate capital needs, BVI-registered Sing Kung closed on a private equity placement of $14.6 million by Chardan, investors being familiar with the infrastructure sector development in China.
It is anticipated that acquisition of the BVI company will close before the end of the year 2008. Now the agreement between the companies is subject to IAG shareholder approval, provided that IAG will redomicile to the BVI; IAG will acquire 89.6% of the capital stock of Sing Kung; the merged company will seek to acquire the remaining 10.4% through an exchange offer to Chardan at closing.
