Hong Kong-listed Tak Shun Technology Group Ltd said it has agreed to buy a controlling stake in a Chinese mainland-based timber resources management company for 1.38 billion HK dollars as part of plans to diversify its business.

The company said in a statement that it bought 70 percent of Green & Good Group Ltd, whose sole asset is a 100 percent stake in Leeka Wood Co Ltd, a timber resources company.

Green & Good owns 21,930 hectares of timber resources in the provinces of Yunnan, Hunan and Hebei.

Tak Shun said it will pay 200 million HK dollars in cash for the purchase, while allotting 250 million HK dollars worth of shares and 929.7 million HK dollars worth of convertible notes to the seller, Superview International Ltd.

The company agreed to issue 556 million shares at 0.45 HK dollars each, representing 16.7 percent of Tak Shun's enlarged share capital.

Tak Shun is also issuing two-year convertible notes at a conversion price of 0.45 HK dollars each as payment for the stake.

Upon full conversion and the issue of shares, Superview will be able to own up to 48.53 percent of the vendor.

Tak Shun, which is engaged in the manufacture of electronic products, "consider the diversification of business into new areas of high growth will be in the best interest of the company."

It said it plans to continue with its current business.