China Resources has bought a $55.9million, 15.3% minority stake in 104-year-old Christchurch diversified agribusiness company Scales Corporation, from Direct Capital Investments Ltd.
Hong Kong-based China Resources is a state-owned enterprise and reportedly the largest supermarket owner in China. Scales confirmed an earlier announcement from China Resources that it had acquired 21.5million shares at $2.60 each.
‘‘Scales welcomes China Resources as a significant minority shareholder, and as a party who can provide support to Scales in its ongoing initiatives in China,'' Scales said in a brief market statement.
Scales shares were up about 8%, at $2.69 after the announcement yesterday, having soared 80% during the past 12 months.
Craigs Investment Partners broker Peter McIntyre said the purchase ‘‘was another food story'', reiterating the increasing amount of imported food China was consuming.
Just three weeks ago, Scales reported its half-year result, saying sales of premium apple brands had boosted its profitability to record levelsA total 3.15million 18kg fruit boxes were sold during 2015, which reached the 2018 target. Scales was now targeting 3.5million boxes by 2020.
Revenue from horticulture was $178million, storage and logistics $95.6million, and food ingredients $40million.
At the time, Scales maintained its previous full-year guidance, with underlying earnings before interest, tax, depreciation and amortisation still in a range of $48million to $55million.
