Canada-based capital pool company KCC Capital Corporation, incorporated on August 2, 2007 and publicly listed on January 31, 2008, entered into a letter of intent with British Virgin Islands-registered company Feng Prosperous International Limited. KCC Capital's Qualifying Transaction relates to the acquisition of a private Chinese company Shenyang Lufeng Foodstuff Co., Ltd. (through its holding company), a private HK-based company Lufeng Development Limited, and its holding company - British Virgin Islands private company Lufeng International Limited.
Lufeng companies are working in the Chinese food industry, and are principally engaged in raising, slaughtering and processing of beef cattle, as well as the production, sale, marketing, distribution and export of beef products, mainly in the city of Shenyang, Liaoning province of China. The companies also export products to the Middle East region.
Under the terms of the acquisition transaction, KCC will acquire control of Lufeng, for a consideration of such number of common shares that represents 97.12% of the issued and outstanding shares of the Canadian company, after completion of the acquisition. The consideration will be settled between the parties prior to executing the definitive agreement for the acquisition based on the fact that the current KCC shareholders will own approximately 2.88% of Lufeng.
Also, KCC will complete a concurrent offering prior to the closing of the transaction. It is expected that the company will complete a share consolidation prior to the closing of the concurrent offering, as a result of which company's shareholders will hold approximately 575,868 common shares immediately prior to the acquisition, and that the existing holders of company options will hold options to acquire approximately 64,953 common shares of the Company at an exercise price of approximately CAN$1.493 per share.
KCC Capital will re-domicile from British Columbia to the Cayman Islands or other jurisdiction prior to completion of the acquisition transaction.
