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15 May

New World Services acquires Ngo Kee, augments position in construction industry

In its latest move to further strengthen its leading position in the construction industry, New World Services Limited (NWS) has today announced its acquisition of the entire issued share capital of Ngo Kee Construction Company Limited (Ngo Kee) from Wai Kee Holdings Limited (Wai Kee) for HK$43 million. Upon completion of the transaction, Ngo Kee will be a wholly-owned subsidiary of NWS. 

The acquisition will reap substantial benefits for NWS. With the synergy created by the acquisition, NWS will be able to maximize its operations in the building and construction field as well as gain through a substantial talent transfer from Ngo Kee. 

NWS will acquire the building construction company for a transaction of HK$43 million, payable in two installments. The first HK$8 million will be paid on completion, and a deferred payment of HK$35 million after the lapse of a Put Option, scheduled for 1 July 2003. The transaction is expected to be completed by August 2001. 

The agreement is pending approval by the Independent Shareholders which is anticipated to take place at a Special General Meeting to be convened by Wai Kee. 

On completion, Wai Kee will subscribe for one Preference Share in Ngo Kee. As a result, Wai Kee will be entitled 100 per cent of net profit after taxation derived from the projects in So Kon Po, Stonecutters Island, Kennedy Town, Fanling, Chatham Road, Lok Ma Chau, Kam Tin and Shek Lei Estate to be completed shortly. NWS will be entitled to 30 per cent of net profit after taxation derived from existing building or construction projects in Tin Shui Wai, Yau Tong, Hung Hom Bay Reclamation Area and Ice House Street. It is expected that the total profit generated from these four projects attributable to NWS will not be less than HK$16 million. 

The entry of Ngo Kee to the NWS conglomerate marks a significant milestone in realizing NWS's vertical integration of its construction services businesses, as it adds to the depth and breadth of the company's various business divisions.