Chinese pork producer WH Group issues shares worth US$597M to its CEO, one of its executive directors as a reward for their contribution in Smithfield Foods acquisition, according to company filing

SHANGHAI , April 15, 2014 () – Chinese pork producer WH Group has issued shares worth $597 million to two of its executives as a reward for their contribution in the acquisition of US giant Smithfield Foods, a company filing showed.

WH Group, formerly known as Shuanghui International Holdings, is the world's largest pork producer, and the company is seeking a Hong Kong listing to raise more than $5 billion in what would be the world's biggest initial public offering (IPO) for a year.

In a listing document published Tuesday on the WH Group website, the firm said chief executive and chairman Wan Long was issued 573.1 million shares last October.

Yang Zhijun, an executive director in charge of investment, mergers and acquisitions, was also issued 245.6 million shares in the same month, the document showed.

The allotment will give Wan and Yang an approximately 3.92 percent and 1.68 percent stake respectively in WH Group upon completion of the firm's IPO.

The company said the share awards, with an estimated fair value of $597 million at grant date, were "to recognise and reward their contributions to the acquisition of Smithfield".

The share allotment to Wan and Yang, part of WH Group's $639 million share-based payouts last year, had cut into the company's profits, leading to a loss of $67 million in 2013 compared to $468 million of profit in 2012.

In May last year WH Group, under the Shuanghui name, agreed to buy Smithfield Foods in a deal valuing Smithfield at $7.1 billion, making it the largest ever Chinese acquisition of a US company.

The pork firm could not be reached by AFP for comment but its chief financial officer Guo Lijun had told state media the one-off non-cash share awards would have no impact on its operational results after it went public.

Based in central China's Henan province, WH Group is involved in the production, slaughter and distribution of pork, a key ingredient in Chinese cuisine. It is also a shareholder of Spanish meat firm Campofrio Food, according to its website.

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(c) 2014 Agence France-Presse

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