Corn Oil Maker Changshouhua’s Owner Explores Stake Sale

(Bloomberg) -- The owner of Changshouhua Food Co. is exploring a sale of a controlling stake in the Hong Kong-listed corn oil producer, according to people familiar with the matter.

Chairman Wang Mingxing, who holds a combined 52% with his family, is working with an adviser on the potential sale, said the people, who asked not to be identified as the discussions are private. The adviser has reached out to some food companies and private equity firms to gauge interests, the people said. Wang and his family’s majority stake in Changshouhua was valued at about HK$900 million ($116 million) as of Friday midday.

The majority shareholders are considering a sale at a time when Changshouhua’s parent -- Shandong Sanxing Group Co. -- is tackling debt that has ballooned to 4.5 billion yuan. Highlighting the challenges, S&P placed Shandong Sanxing on its negative watchlist in November on slow progress on refinancing. About 1.4 billion yuan of its bonds are set to mature in 2020.

Wang and his two brothers own a combined 73.6% stake in Shandong Sanxing, the latest interim report shows.

Deliberations are at an early stage and they may not lead to a transaction, the people said. Representatives for Changshouhua and Shandong Sanxing didn’t immediately respond to requests for comment.

Changshouhua, which means “longevity flower,” produces corn oil and other edible oil and has been listed in Hong Kong since 2009. It reported 1.4 billion yuan in sales and 153 million yuan in net income for the first six months in 2019, which were about 3% and 4% lower than the same period of last year.

Shares of Changshouhua were little changed this year, giving it a market value of about HK$1.7 billion.

©2019 Bloomberg L.P.

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