Hong Kong-based Fushan International Energy Group Ltd will pay HK$10.53 billion ($1.4 billion) for coking coal mining assets in China, as rapid growth in the steel and coking coal industry fuel demand.
Fushan will buy the coking coal mining assets in China's Shanxi province from Fortune Dragon Group Ltd, which is 7.50 percent-owned by Fushan's controlling shareholder and chairman, Wong Lik Ping, and 56.92 percent-owned by businessman Xing Libin. On completion of the deal, Wong's holding in Fushan would be diluted to 36.07 percent from 50.83 percent, while Xing would hold 19.38 percent of the Hong Kong-listed company.
The coking coal products producer said on Thursday some HK$4.86 billion would be paid in cash and the remainder would be settled through the issue of 1.26 billion new shares, or 34.06 percent of its enlarged share capital, at HK$4.50 each.
That would represent a 0.7 percent discount to the stock's last closing price.
Prices of coking coal in Shanxi province, China's top producing area, have jumped in recent days as small mines are being shut in a safety campaign ahead of the Olympic Games. More than half of the country's coking coal is produced by small and medium-sized mines, which have been blamed for China's deadly mine safety record.
Source: Reuters
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