Unifi, Inc. has signed a non-binding letter of intent to form a joint venture type company with Kaiping Polyester Enterprises Group Co. in Kaiping, Guangdong, China to manufacture and sell certain polyester and nylon products. It is anticipated that Unifi will own 75% of the joint venture company, which is estimated to have approximately $300 million in annual sales.
Kaiping, a company owned and operated by the Kaiping City Government, is one of the largest polyester textile filament producers in China. Kaiping owns approximately 56% of Guangdong Kaiping Chunhui Co., Ltd., a publicly traded company on the Shenzhen Stock Exchange, which ownership interest is anticipated to be part of the assets Kaiping contributes to the joint venture.
Closing the proposed transaction is contingent upon satisfactory completion of the parties due diligence procedures, negotiation and agreement on definitive agreements (including certain key financial terms), and receipt of certain governmental, third party and corporate approvals. The letter of intent contemplates that the proposed transaction will close by the end of calendar year 2003.
