China Direct passes on plant stake
Thomas Russell -- Furniture Today, September 5, 2005
Davie, Fla. — China Direct Trading Corp., an importer of Chinese products, has terminated plans to purchase an interest in its Beijing-based furniture supplier.
The company had said earlier it planned to acquire a 40% equity stake in Beijing Hua Wei Furniture Manufacture Co.
China Direct, which formed a furniture division last year, will still source product from Beijing Hua Wei.
However, China Direct CEO Howard Ullman said his company chose to terminate the purchase and related joint venture because of a significant decline in the cash value of Beijing Hua Wei. He did not give specifics, saying China Direct's board determined the deal wasn't in the company's interest.
He said China Direct will continue to look for merger and acquisition opportunities with "North American candidates that are more complementary to (the company's) existing trading company business lines and easier to manage and integrate into its public holding company structure than a Chinese company."
Beijing Hua Wei had planned to open a 1 million-square-foot manufacturing complex at the end of 2006, but it was unclear whether it would move forward now that the agreement has been terminated.
