On May 20, 2011, ORB announced that it had consummated the acquisition of 100% of the equity interest in Hebei Hongtu Auto Parts Co., Ltd (“Hongtu”) from Hongtu’s shareholders. In connection with the consummation of the share exchange pursuant to the Stock Purchase Agreement, ORB issued 3,700,000 Ordinary Shares to the Hongtu shareholders, resulting in the Company having 22,070,634 Ordinary Shares issued and outstanding. As a result of the share exchange, Hongtu became a subsidiary of ORB.
Founded in September 2008, Hongtu manufactures rubber gaskets and sealants for the Chinese automobile industry, including for automobile windows, doors, baggage covers and engines. Hongtu has manufacturing facilities located in Qinghe County, Xingtai City, Hebei Province, China. It can produce whole sets of rubber gaskets for different types of vehicles, including medium-grade cars, mini cars, trucks, SUV and MPV etc.
The management believes that this acquisition is beneficial to the whole group by enhancing our competitive advantages in the market. Firstly, we may enlarge our customer base through acquisition of Hongtu. Secondly, it shall enrich our products categories and extend the application area so as to meet different demands from various customers and also provide more choices to customers. Finally, we may increase our market share in rubber gasket industry. After the acquisition, our annual production capacity of rubber gaskets shall arrive at a milestone. As a result, our reputation in the similar market can surge to top 5. This shall greatly enhance our bargaining power when negotiating with automobile manufacturers and suppliers.
