AUSTRALIAN INNOVATION LIMITED. 2003-01-24 ASX-SIGNAL-G
HOMEX - Sydney
+++++++++++++++++++++++++ The Directors of Australian Innovation Limited ("AIL") are pleased to announce that its 72% owned subsidiary Dulhunty Engineering Limited ("DEU") has today signed a Share Sale and Purchase Agreement to acquire a new wholly owned subsidiary.
The acquisition of the new company is subject to satisfactory completion of Due Diligence and on completion of Due Diligence a meeting of AIL shareholders will be called to approve the acquisition.
The new acquisition is consistent with the new investment policy adopted by AIL to grow the Company by acquiring cash flow positive and profitable businesses to compliment its existing operations. The first investment under this new corporate policy, announced in May 2002 and completed in August 2002, was the acquisition through its wholly owned subsidiary Dulhunty Power Limited ("DPL") of Dulhunty Engineering Limited ("DEL") and its wholly owned subsidiary Dulhunty Yangzhou Line Fittings Co, Ltd ("DYLF") which manufactures at its foundry at Jiangdu in the Jiangsu Province, high quality cast line fittings and related products for the power transmission and distribution sector. If the acquisition proceeds, the new company will be wholly owned by DEL along side the manufacturing division DYLF. Together, the two business lines provide AIL with significant opportunities in the energy sector - low cost manufacturing in China, research & development in Australia, deep energy sector relationships, highly experienced and recognised management team, proprietary products, profitable core earnings base in power line fittings and significant upside potential in the emerging sector of distributed generation.
The acquisition is to be funded by DEL from its own cash resources and by further capital subscribed into DEL by the DEL shareholders, including AIL. AIL's contribution is expected to be approximately $950,000.
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