Prosperity Minerals
Prosperity is an iron ore trader serving customers in the People's Republic of China (the 'PRC') and holds investments in entities involved in the manufacture and sale of cement and clinker in the same market.
Prosperity also has a real estate division and has recently entered into a number of conditional agreements designed to build up a portfolio of PRC property and development assets.
Prosperity Minerals is a sponsor of this site. Proactive Investors guarantees coverage of all sponsor news announcements from an investor view-point. For an in-depth analysis of Prosperity Minerals, click here.
Prosperity Minerals to retain US$15 million debt after £300 million disposal in China
Cement plant operator Prosperity Minerals Holdings (AIM: PMHL) provided
further details relating to its recent sale of a Chinese cement
business Upper Value Investments Limited for £300 million to TCC
international Holdings (HKG: 1136), also disclosing financial
information for the target company.
The company clarified that
all debt relating to the cement business including the senior secured
notes issued by the target company to Morgan Stanley & Co
International and certain institutional investors with a current
outstanding amount of US$90 million, but excluding a term loan with an
US$15 million outstanding relating to the acquisition of Anhui Chaodong
Cement Company Limited, will be transferred to TCC upon completion of
the disposal, while Prosperity will retain its debtless iron ore
trading business.
Following the transaction, the company will
possess the iron ore trading business, a substantially increased cash
position after bagging £300 million as a result of the sale along with
a 33.06% interest in Shanghai-listed Anhui Chaodong, which has a market
capitalisation of approximately £178 million and a share value
attributable to Prosperity of about £65 million.
The company has
also released the target company’s unaudited interim results for 2008
and 2009 including companies under the company which were excluded from
the sale. The business posted revenues of US$94 million in the six
month ended 30 September 2009 and US$87.6 million in the equivalent
period of the previous year, while pre-tax profits amounted to US$1.43
million in 2009 and US$0.27 million the year before. Losses for the
full year to 30 September stood at US$1.65 million compared to US$0.68
million a year ago.
The excluded companies posted full year losses of US$3.2 million in 2009 and US$0.7 million in 2008.
The
agreement, which is expected to complete in March 2010, followed the
MoU (memorandum of understanding), which was signed by the companies in
late November. Shares in Prosperity rose 17% on the news of the MOU and
were suspended from trading on 14 December, pending the issue of an
announcement about the transaction. The suspension was lifted today and
shares added a further 20%.
The sale will be terminated if not completed by 31 May 2010.
Shares
in Prosperity added a further 7% on the news after shooting up from 104
pence to 120 pence following the announcement of the sale.
Other Prosperity Minerals news
- Prosperity Minerals sees more domestic demand coming from China’s new 5 year plan
2010-11-30 - Prosperity Minerals performing in line with expectations
2010-10-08 - Prosperity Minerals completes acquisition of 25% stake in Liaoning Changqing Cement
2010-09-01 - Prosperity Minerals receives final payment from disposal of cement business
2010-08-21 - Prosperity Minerals to pay £70.1m for Guangzhou properties
2010-07-30
