Business & Finance
Business and Finance
Business and Finance
Tue, June 28, 2011
Mon, June 27, 2011 SUNWAH INTERNATIONAL ANNOUNCES PROPOSED PURCHASE AND NOVATION OF RAB ENERGY AND OCTANE FUNDS, ACQUISITION OF A MAJORITY INTERES
TORONTO, June 27, 2011 /CNW/ - Sunwah International Limited (TSX: SWH) ("Sunwah" or the "Company"), an Asian-based financial services firm, (formerly known as "Kingsway International Holdings Limited") is pleased to announce that its asset management arm, Sunwah International Asset Management ("SIAM"), has entered into a non-binding letter of intent (the "RAB LOI") with RAB Capital plc ("RAB Capital", AIM: RAB) for the purchase and novation of the investment management agreements of its Energy Fund and Octane Fund (the "Novation"). Sunwah also announces that SIAM has entered into discussions to acquire an 80% stake in PCE Investors Limited ("PCE"), a UK-based, FSA regulated, institutionally credible fund management business with approximately US$550 million assets under management.
Sunwah also announces that it has entered into a non-binding letter of intent with an Asian based alternative asset manager who has expressed its intention to commit to invest US$50 million into the Energy and Octane Funds and a further amount of approximately US$200 million to back stop redemptions and secure the capital of the Funds (the "Commitment").
Completion of the Novation, funding of the commitment and acquisition of the interest in PCE will officially launch Sunwah's asset management business. The completion of these transactions will mark a major shift in the Company's business model towards a more diversified and stable income base.
"These transactions provide confirmation of Sunwah's business plan to become a leading global funds platform," commented Doug Betts, President and CEO of Sunwah. "It is very encouraging to have this level of investor support. Securing additional investments from sophisticated investors, when combined with the robust risk management systems of PCE and its experienced operational management team, puts us well ahead of our original business plan. The combined effect of the transactions will result in SIAM controlling a fully regulated global operating asset management platform with a target to achieve USD$1 billion of assets under management by year end."
As described in the Company's news release dated January 31, 2011, SIAM is becoming a global fund business bringing an Asian perspective to emerging and growth markets. The SIAM business will operate on the "family of funds" model. SIAM will recruit "best in class" fund managers, grow assets and identify investment opportunities. "Both the Energy Fund and the Octane Fund meet this best in class standard," said Betts.
RAB Capital is a specialized asset manager publicly traded on London's Alternative Investment Market. Its Energy Fund was awarded the Eurohedge Award as best global long short equity fund of 2010 and its managers have received numerous accolades over the past decade. The compound annual return of the Energy Fund has been 16% since the fund's inception in 2004 and it has outperformed the FTSE 350 Oil & Gas Index by 129% and the AIM Oil & Gas Index by 164% since inception.
PCE is an alternative asset management business specializing in fundamental and systematic portfolio management processes within a rigorous and embedded risk management environment. Fund managers with PCE are supported by an institutional infrastructure with an integrated risk management overlay. PCE delivers an alignment of interests between investor and fund manager through transparent and robust systems of risk management, reporting, legal and compliance and a client-focused business infrastructure. PCE is authorized and regulated by the Financial Services Authority ("FSA") of the United Kingdom; it is registered with the Securities and Exchange Commission ("SEC") of the United States and is able to market its funds to professional investors throughout Europe. PCE has a presence in London, Singapore and New York, providing 24-hour risk management and monitoring coverage.
"In this day and age, governance, risk management and vigorous systems and controls are absolutely essential to safeguard the interests of investors," commented Bill Majcher, CEO of SIAM. "I have dedicated considerable years of my professional life to enhance and protect the integrity of capital markets. I am very confident that PCE not only meets these expectations but in fact exceeds them."
"We are very pleased by the opportunity to launch the business with two of the leading funds in the energy sector," continued Majcher. "Our initial discussions with many existing investors confirm they are supportive of the Novation and are pleased to see Sunwah involved."
The current portfolio manager of both the Energy and Octane Funds will continue to manage the Funds subsequent to the Novation. Consideration for the Novation consists of a combination of cash and a share in future management and performance fees in favor of RAB Capital.
Funding of the intended Commitment is conditional on the completion of the Novation. The Commitment when advanced will serve as new capital for the Funds and to effectively backstop any potential redemptions by current investors.
Closing of the Novation, the acquisition of the interest in PCE and funding of the Commitment is conditional on a number of factors, including executing definitive legally binding agreements, the approval from boards of directors of Sunwah, PCE and RAB Capital, and SIAM having closed its acquisition of PCE Investors Limited. The Novation is expected to close the later of regulatory approval or August 31, 2011.
About Sunwah International Limited (TSX: SWH)
Sunwah is a strategically positioned asset-based financial services provider, linking the global investment community with China's high growth economy. The Company now comprises three integrated divisions: Capital Markets Group, consisting of brokerage and financial services, including investment banking; Strategic Investment Group, a merchant bank focused on mining and natural resources; and an Asset Management Group specializing in private equity funds. The Company's primary subsidiary, SW Kingsway Capital Holdings Limited ("SWK"), is based in Hong Kong and listed on The Stock Exchange of Hong Kong. SWK is licensed to provide a range of financial services. Sunwah operates from five offices located in Hong Kong, Beijing, Shanghai, Shenzhen and Toronto.
China is widely recognized as an increasingly important player on the world's financial stage. As the country continues to grow, its greatest needs will lie in energy and resources. Following a recent restructuring, the Company is positioned as a middle tier provider of financial services in these sectors and an opportunistic investor in these and related sectors. The Company's strategy is to use investment activities to generate advisory services revenue while creating value for its shareholders through asset accumulation.
Leveraging a 20-year track record and significant relationships throughout Asia, Sunwah continues to operate as a China focused multi-discipline asset based financial services firm, with a concentration on natural resources, infrastructure and real estate.
Founded in 1990, Sunwah is listed on the main board of the Toronto Stock Exchange under the symbol SWH.
For more information on Sunwah's core business and new strategic direction, please visit the Company's website at [ www.sunwahinternational.com ].
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements that are based on the beliefs of management and reflect Sunwah's current expectations. In certain cases, forward-looking information can be identified by the use of words such as "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may", "should", "will", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". This press release relates to the execution of the RAB LOI, and is not intended to, create legally binding relationships. The forward-looking statements in this press release also includes information relating to the Novation from RAB Capital, the potential investment by an Asia Institutional Investor, the Company's shift in its business model toward a more diversified and stable income base and plans to become a leading global fund platform, the platform model that SIAM will operate, and the acquisition of a majority interest in PCE Investors Limited. The forward-looking statements are based on certain assumptions, which could change materially in the future, including the assumption that the non-binding letters of intent will lead to a definitive agreement, that the transaction contemplated in the letters of intent will be completed, the Company will shift its business model toward a diversified and stable income base by completing such a transaction and become a leading global fund platform, that SIAM will operate a "family of funds" model, and that SIAM will acquire "best in class" energy funds and management terms including acquiring an 80% interest in PCE and that SIAM will achieve USD$1 billion under management by year end. By their nature, forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include the risk that the letter of intent may be terminated, that the transaction contemplated in the letter of intent may not result in a binding agreement and any agreement may have terms and conditions different from those contemplated in the letter of intent, that any agreement may not be completed, a portion of such amount, or any amount, that the Company may not shift its business model towards a diversified and stable income base by completing such a transaction or become a leading global fund platform, that SIAM may not operate a "family of funds" model, or that SIAM may not acquire "best in class" energy funds and management teams or acquire an 80% interest in PCE or that SIAM will achieve USD$1 billion under management. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, investors should not place undue reliance on forward-looking information. Forward-looking information is provided as of the date of this press release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required in accordance with applicable laws.
