Hong Kong-based Casil, whose parent company is China Aerospace International, a Beijing electronics and real estate company controlled by the government, has seen its stock plummet 65% to HK$0.73 from a peak of HK$2.07 in March. In 1999 the company lost HK$193.4 million and is hoping its investment in Winfull will help lift earnings.
Winfull is a Beijing-based company that makes global positioning systems. It owns 78% of Beijing Qihua, a company that operates GPS-positioning, dispatch and management. Beijing Quihua had an unaudited net loss of RMB650,000 ($78,505) in 1999, compared to a loss of RMB58,000 in 1998. Winfull also owns 51% of Tangshan Qihua, an operator of long distance transportation fleet GPS-positioning. The company was formed in June this year.
The acquisition "will enable the company to develop a GPS and ITS technology-based operator business capable of generating stable recurring revenue streams in future," the company said.
In addition to cash, Casil will give Winfull a 12% stake in Castel Intelligent Transportation system, a new company set up by Casil to house its GPS and dispatch management businesses. The new company will obtain a cash injection of HK$26 million, before the acquisition of Winfull is completed, the company said.
The acquisition is dependent on both companies obtaining regulatory and legal approvals for the transaction by Aug. 15.
