See feature article below: SkyPeople Fruit Juice, Inc. (NASDAQ: SPU)
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Report For: SkyPeople Fruit Juice, Inc. (NASDAQ: SPU)
Shares of SPU are up 39% at $2.50 per share on news of a share transfer agreement involving one of their subsidiaries. The company’s shares normally trade about 20,000 per day, but today share volume is over 3 million.
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SkyPeople Fruit Juice, Inc., through its subsidiaries, produces and sells fruit juice concentrates, fruit beverages, and other fruit-related products in the Peoples Republic of China and internationally. The company sells its products directly to end-users; to hotels, supermarkets, and other outlets; and through trade Websites, as well as indirectly through distributors and agents. SkyPeople Fruit Juice, Inc. is headquartered in Xian, the Peoples Republic of China.
On June 15, 2016, Hedetang Holdings Co., Ltd. (the “Hedetang”), a wholly owned subsidiary of SkyPeople Fruit Juice, Inc. (the “Company”) entered into a Share Transfer Agreement (the “Agreement”) with Shaanxi New Silk Road Kiwifruit Group Inc. ( the “NSR”), a limited liability corporation registered in China.
Pursuant to the Agreement, NSR will acquire 51% of the equity shares of Shaanxi Guoweiduomei Beverage Co,. Limited, a wholly owned subsidiary of Hedetang (the “Shares”). The tentative total transfer price for the Shares is 300 million RMB (approximately $46 million) and is subject to and will be settled according to the final price in the valuation report to be issued by an appraisal firm jointly engaged by both parties. NSR shall pay the total transfer price to Hedetang within six months of the effective date of the Agreement. If NSR fails to pay the total transfer price within 6 months due to the delay of the approval process from the local authority, NSR can receive a payment extension for up to twelve months from the effective date of the Agreement upon the negotiation and agreement by the parties. Because NSR is a state-owned enterprise in China and its investment needs to be approved by a higher level administrative authority in China, NSR has the right to terminate the Agreement unilaterally if it fails to receive the approval from such administrative authority within one year from the date of this Agreement.
On May 31, 2016, SkyPeople Juice Group Co., Ltd. (“Skypeople China”), a 73.42% owned subsidiary of the Company transferred its wholly owned subsidiary Hedetang Holdings Co., Ltd. (the “Hedetang”) to Skypeople Foods (China) Co., Ltd., a wholly owned subsidiary of the Company (“Skypeople Foods China”) for 50 million RMB (approximately $7.69 million). SkyPeople Juice International Holding (HK) Ltd. a wholly owned subsidiary of the Company and a 73.42% shareholder of Skypeople China, Shenzhen TianShunDa Equity Investment Fund Management Co., Ltd., a 26.36% shareholder of SkyPeople China and Mr. Hongke Xue, a director of the Company and a 0.22% shareholder of SkyPeople China (the “Shareholders of Skypeople China”) approved the transfer on May 21, 2016. The transfer of Hedetang from SkyPeople China to SkyPeople Foods China is a part of restructuring of the Company’s business in China. After the transfer, Hedetang became a wholly owned subsidiary of Skypeople Foods China and the Company.
Source – Company 8-K filing posted 6-21-16
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