ADSL Asia Distrib.

RNS Number:9483K
Asia Distribution Solutions Limited
02 January 2008

Asia Distribution Solutions Limited

2nd January 2008



                      Asia Distribution Solutions Limited
                           ('ADSL' or the 'Company')

                    Acquisition of Chengdu beverage business


In its AIM admission document dated 1 November 2007, ADSL confirmed it had
signed a non-binding letter of intent on 28th June 2007 to acquire Chengdu Gao
Li Yuan Beverage Co., Ltd.

The Board of ADSL is pleased to announce that it has negotiated an amended
arrangement and, accordingly, has today conditionally agreed to acquire part of
the assets and intellectual property rights of Gao Li Yuan Beverage Co., Ltd
(the 'Gao Li Yuan') through investing in Chengdu Gao Yuan Commercial trading
Co., Ltd (the 'JV').  The consideration to be paid by ADSL to the vendors, one
of whom is Mr Robert Ling, comprises RMB1.0 million upfront cash plus up to RMB
1.0million in cash which has to be used to subscribe for new ADSL Ordinary
Shares under an employment contract based on the achievement of profit targets
in the period ending 31 December 2010 by the JV, as is described in more detail
below.

ADSL has entered into a joint venture agreement ('JV agreement') with Mr Robert
Ling, the current general manager and the majority shareholder of Gao Li Yuan,
to form the JV which is classified as a Sino-Foreign Joint Venture in the
People's Republic of China ('China').  The JV will be established for the
purpose of acquiring certain of the assets of Gao Li Yuan. Under the terms of
the JV agreement, ADSL will hold 65 per cent of the JV's equity and the
remaining equity will be held by Mr Robert Ling, the majority shareholder of Gao
Li Yuan.  Both parties will contribute a total capital of RMB3 million in cash
according to their respective shareholdings in the JV, to provide the JV with
registered capital of RMB3million.

The JV will enter into a conditional trade asset sale and purchase agreement
(the 'Agreement') with Gao Li Yuan to acquire part of the assets and
intellectual property rights of Gao Li Yuan. The cash consideration of RMB1
million is to be  settled  as to 50 per cent three days before the acquired
assets are transferred and the remaining 50 per cent is to be settled 10 days
after the acquired assets are transferred.

Completion of the Agreement is conditional, inter alia, upon the following
conditions:

1.     The value of the acquired trade assets audited and assessed by a
qualified licensed  valuer is not over RMB1 million;

2.     Gao Li Yuan terminates its existing business and repays all its debts
without delay, and deregisters its business from the relevant PRC authorities
within a reasonable time agreed by both parties; and

3.     any other regulatory approvals as may be required being obtained
regarding the formation and approval of the New JV Co, Chengdu Gao Yuan
Commercial trading Co., Ltd.


In addition, ADSL has entered into an employment contract with Mr Robert Ling
whereby he is to be appointed as General Manager of the JV. Under the terms of
his employment contract, Mr Ling is to receive RMB1.05 million for the
subscription of a 35 per cent interest in the JV.  He will receive a gross
monthly salary of RMB40,000. As has been described above, subject to the
achievement by the JV of profit targets, Mr Ling will also receive deferred
consideration by way of the issue and allotment to him of up to RMB1 million new
Ordinary Shares in ADSL.  Furthermore, subject to the achievement of these
profit targets, Mr Ling may also be awarded up to 300,000 share options.

Gao Li Yuan is a beverage distribution business located in Chengdu, the capital
of Southwest China. It distributes beverage products including branded juice,
coconut drinks, yogurt and bottled water through some major retail chains in
Chongqing, Chengdu and the rest of Sichuan Province. The latest financial
statements of Gao Li Yuan for the period ended 30 November 2007 submitted to the
China tax authority show that Gao Li Yuan had a turnover and net loss of RMB5.37
million and RMB0.48 million respectively. The total assets and net assets of the
company are RMB1.73 million and RMB1.44 million respectively.

The JV will manage and operate locally the ADSL product range of wines Snapples
(Cadbury Schweppes Juice flavoured tea) and beers as well as acting as the local
 importer and exporter of alcohol and beverages, via the wholesale market as
well as the third party commission agency sales.  The JV will also be providing
the relevant supporting services for the domestic and international markets of
Palm Tree Brand of coconut juices and Watson's Brand water, Sunkist Brand of
Orange Drinks.  The JV will commence its trade as soon as the appropriate
approvals are obtained and various registrations are completed, through 10
international and national supermarket accounts and 300 second and third tier
wholesalers distributing local brands and other assorted products.

The acquisition the Chengdu beverage business will extend ADSL's distribution
network and further diversify ADSL's product portfolio. The Directors believe
ADSL will be able to add considerable product range both local and imported to
the JV through distributing ADSL's existing imported wines, spirits and other
products to the JV's new customers.




 Steve Wong, ADSL's Chief Executive, commented:

"Establishing the JV in Chengdu will enable us to broaden our geographic coverage to an important and large regional 
consumer market in China and it will also expand the scope of our distribution services. By adding our own products and 
other supplies to the existing infrastructure we expect Chengdu Gao Yuan Commercial trading Co., Ltd will contribute 
positively to the Group's turnover and profits.

We continue to seek ways of improving our coverage through the major cities in China and have several other prospects 
which we are currently evaluating."





Given the nature of the proposed investment and acquisition, the Company has

provided such disclosure as is required in accordance with Schedule 4 of the AIM
Rules as a Substantial Transaction. A further announcement will be made in due
course following the completion of the Agreement.



For further information please contact:



Asia Distribution Solutions Limited

Michael Kingshott, Non Executive Chairman               020 7583 8833

Paul Chow, Chief Financial Officer                            +852 2528 3323



Evolution Securities China Limited

(Financial adviser and broker)

Barry Saint                                                                  020
7220 4850

Armen Ho                                                                    020
7220 4850



Evolution Securities Limited

(Nominated adviser)

Jeremy Ellis                                                                020
7071 4300



cityPROFILE

Jonathan Gillen                                                           020
7448 3244



END




                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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