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.
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Prosperity Minerals to pay £70.1m for Guangzhou properties
Former cement operator Prosperity Mineral Holdings (LON:PMHL) has made another step in transforming itself into a Chinese real estate focused company in line with the change in strategy announced in February, announcing the details of the purchase of the Guangzhou properties flagged in June, including that it will pay £70.1 million for assets valued at £177 million.
The company has paid an initial refundable deposit of £18.1 million with the remainder due upon completion. Independent valuer Jones Lang LaSalle Sallmans has valued the properties at £177 million. After taking this estimate into account, the carrying value of the Guangzhou Properties as included in the audited net asset value of Bliss Hero HK stood at £171.8 million.
The properties include the majority of the Silver Bay Plaza and a 55% stake in the Dongfang Wende Plaza which is currently under construction.
Bliss Hero owns and manages 11,472m2 of the office and commercial block known as Silver Bay and owns a 55% stake in Fuchan Dongfang which is building a mixed use development. The company has announced that it is anticipated that development of the Dongfang shopping arcade is expected to be complete by mid-2011 with pre-sales of certain residential buildings schedule for September 2010.
The independent directors have deemed the terms of the acquisition fair and reasonable to Prosperity’s shareholders.
The deal now hinges on the approval from Prosperity’s major shareholders, Prosperity International Holdings Ltd (HICL), upon which the company will pay the remaining £51.9 million.
Broker Daniel Stewart & Company (DS&C) said it was encouraged by the news, calling the latest development an “important step in the evolution of Prosperity into a real estate focused company,” also noting that the company continued to deliver on its earlier statements about the change of focus.
Prosperity Minerals sold most of its Chinese cement businesses earlier this year for over £385 million to focus its investment strategy on its iron ore business and seek expansion into new markets in China.
According to Prosperity, the PRC’s long term urbanization plan brings increased demand for high-quality housing in China’s cities. Furthermore, the PRC real estate market has recently entered a down-cycle, offering an opportune time to enter the PRC real estate market.
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 revenues hit US$849 million in FY09
2010-07-06
