TIDMPMHL
RNS Number : 2375X
Prosperity Minerals Holdings Ltd
06 February 2013
6 February 2013
Prosperity Minerals Holdings Limited
("Prosperity" or "the Company")
Proposed disposal of interest in cement manufacturer
Update on other trading activities
Prosperity Minerals Holdings Limited (PMHL.L), an iron ore
trading business serving the People's Republic of China ('PRC'), a
real estate owner/developer in the same market and an investor in
two PRC cement manufacturers, is pleased to announce that it has
conditionally agreed to dispose of its interest in TCC Liaoning
Cement Company Limited ('TCC Liaoning'). In addition, the Company
is providing an update on other trading activities.
Proposed disposal of interest in TCC Liaoning
On 6 February 2013, Prosperity signed a conditional sale and
purchase agreement with TCC International Holdings Limited ('TCC
International') to sell its 16.11% interest in TCC Liaoning for RMB
144.5 million (approximately US$ 23 million) ('the Disposal')
including a provision for PRC capital gains tax.
Completion of the Disposal is subject to TCC International
obtaining the necessary approvals from the Taiwan Investment
Commission and its compliance with the listing requirements in
Taiwan and Hong Kong. The consideration will be received in two
stage payments with a 5 per cent retention provision. The first
stage payment of RMB 115.6 million (representing 80 per cent of the
consideration) is receivable upon receipt of the approval document
from the Foreign Trade and Economic Cooperation Bureau in the PRC,
which is anticipated to take several months. The Company will
provide an update on timing in the next results announcement. The
second stage payment of RMB 21.7 million (representing 15 per cent
of the consideration) is receivable upon completion of the
registration of transfer through the PRC Industry and Commerce
Administration Bureau. The balance of the consideration of RMB 7.2
million (or 5 per cent) will be retained by TCC International as
provision for PRC capital gains tax for one year from
Completion.
Prosperity acquired its interest in TCC Liaoning in September
2010 for a consideration of RMB 100 million and its disposal will
generate a profit before tax of RMB 44.5 million (approximately US$
7.1 million). The proceeds will bolster the Company's cash balances
and afford continued flexibility in investing in its core
businesses. This disposal is a further example of the Company's
ability to generate good returns on its investments.
Update on other Trading Activities
Extension of the Blackrock Metals Inc. Off-take Agreement
Further to the Company's announcement on 21 August 2012,
Prosperity and Blackrock Metals Inc. ('Blackrock') signed a
Supplementary Agreement on 6 February 2013 in which the first
shipment date for iron ore under the Blackrock Off-take Agreement
was extended from no later than the end of 2012 (or another date as
mutually agreed by both parties), to no later than June 2015. In
addition, Prosperity was awarded an extra 800,000 tonnes of iron
ore to be added, at the same discount to the prevailing market
price, to the 4 million tonnes in the original Blackrock Off-take
Agreement at no extra cost.
As part of the original Blackrock Off-take Agreement, Prosperity
provided a deposit of US$ 40 million, which was funded by the
Industrial and Commercial Bank of China and it has extended the
deposit loan in order for the repayment schedule to meet with the
amended shipment schedule of Blackrock.
The Directors remain positive about the Blackrock project.
Reduction of the Century Prepayment
Further to the announcements on 28 September 2012 and 22 October
2012 regarding the Company's strategy of reducing its deposits with
certain mining operators, the Company received a further US$ 4
million from Century Iron Mines on 4 December 2012. Following this
payment, the Company's prepayment with Century Iron Mines has been
reduced to zero, otherwise, the terms of the Century Off-take
Agreement remain unchanged.
Hangzhou City property development project, Zhejiang
Province
The Directors are pleased to announce that on 3 January 2013,
Prosperity signed an agreement with its joint venture partner which
will allow the Company to increase its shareholding in the Hangzhou
development project to 60 per cent for RMB 40 million
(approximately US$ 6.4 million). The additional 10 per cent will be
acquired from the joint venture partner on the same terms as the
original investment, subject to all relevant PRC governmental
approvals being obtained. Assuming majority control enables
Prosperity to take the lead in the development.
Prosperity Minerals Holdings Limited
Patrick Li
Neelke Kruger-Logan +852 3187 2618
Citigate Dewe Rogerson
Martin Jackson +44 (0) 20 7638
Priscilla Garcia 9571
Daniel Stewart & Company plc
Corporate Finance: Paul Shackleton, Antony
Legge, Emma Earl +44 (0) 20 7776
Corporate Broking: Martin Lampshire 6550
Notes to Editors:
Prosperity (AIM: PMHL) is:
- an iron ore trading business serving the PRC;
- a specialised real estate owner and developer in the same
market; and
- an investor in two cement plants, also in the PRC.
Prosperity's iron ore trading business has been operating since
1992 and sources iron ore, for shipment and use in the PRC, from
major international iron ore producers in South Africa, Brazil,
Australia and South East Asia, Thailand and Malaysia in particular.
The majority of the Company's iron ore is sold to large steel
manufacturers in the PRC. In the fiscal years ended 31 March 2011
and 2012, Prosperity shipped 6.3 million tonnes and 4.8 million
tonnes of iron ore respectively. In December 2010, Prosperity
acquired a 35% effective interest in United Goalink Limited (UGL),
a Brazilian mining operation which owns approximately 600 square
kilometres of exploration rights and 3 square kilometres of mining
concession in the State of Ceara. In the year ended 31 March 2012,
UGL shipped 218,808 tonnes of iron ore.
Prosperity has operated a real estate investment and development
division since February 2010 which is focused on creating a
portfolio of PRC property and development assets with good upside
potential and manageable risk. The Company has entered into a
number of agreements with its partners to develop recreational,
commercial and residential projects in Guangzhou City and Changzhou
City in the southern PRC and Hangzhou City in the east. Prosperity
also acquired interests in an existing commercial building in
Guangzhou, which is a regional capital and is located in the Pearl
River Delta, the foremost economic zone in the southern PRC.
Prosperity has two investment associates in the cement
manufacturing industry in the PRC. The Company holds a 33.06%
interest in Anhui Chaodong Cement Company Limited (ACC), located in
Anhui Province in the eastern PRC. The designed sellable production
capacity of ACC is 5.1 million tonnes of cement and clinker per
annum. In addition, Prosperity owns 16.11% of TCC Liaoning Cement
Company Limited which has a designed saleable production capacity
of 2 million tonnes of cement and clinker per annum.
The PRC is the World's second largest economy (behind the US)
and the biggest buyer of iron ore; it is also the largest producer
and consumer of cement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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