The founder and chairman of Dali Foods Group plans to take the Chinese bakery and beverage business private.

Xu Shihui, through his investment vehicle Rongshi International Investment, has put forward a proposal to shareholders to delist the company from the Hong Kong Stock Exchange by way of a so-called scheme of arrangement.

Fujian, Quanzhou-based Dali Foods listed on the bourse in 2015.

Revenue and profits fell in the company’s financial year to 31 December, although the results are not a factor cited as being behind the delisting plan in a joint stock-exchange filing from the investment company and Dali Foods.

The company posted revenue of 20bn yuan ($2.7bn), down 10.5% on the corresponding 12 months, according to its annual report. EBITDA dropped 18.4% to 4.8bn yuan and net profit fell 19.7% to 3bn yuan.

The plan envisages the cancellation of what Dali Foods terms as ‘scheme shares’ but would not include the interests held by the company’s trustees.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Upon the scheme becoming effective, Rongshi International would hold 96.11% of the shares and the trustees would retain their 3.89% interest.

Xu and his family own 85% of the business, equating to around 11.6 billion shares of the approximately 13.6 billion in issue, according to the filing. Bloomberg reported that Rongshi International is “wholly owned by the billionaire”.

Post-transaction, “the scheme shares (other than the founder shares) will be cancelled in exchange for the payment of the cancellation price of HK$3.75 in cash for each such scheme share”, according to the filing.

The shares closed at HK$3.50, or 44 US cents, in Hong Kong today (4 July).

Dali Foods’ portfolio features such products as biscuits and bread, puffed snacks, soy milk drinks and herbal teas.