lse.co.uk
UPDATE 1-China's Chalco seeks Ivanhoe's South Gobi stake for $926 mln
Edited by : AL CIRCLE
2 min read
China's aluminum producer Chalco has agreed to buy Ivanhoe Mining Ltd's controlling stake in Mongolian-focused coal miner SouthGobi Resources for $926 million, as the Chinese state company diversifies into other resources in the face of tough aluminium market.
Aluminium Corp of China Ltd (Chalco) said in a statement on Monday that it will acquire the 57.6 percent stake for C$8.48 per share, a 28.1 percent premium to South Gobi's Friday closing stock price. The Hong Kong price of the offer is HK$65.97, the company said.
Chinese miners are scanning the globe for natural resources to feed the country's fast growing energy needs and Chalco's move to buy control of a Mongolian coal company is part of that strategy. Chalco, China's biggest aluminium maker, has been battling lower metal prices and higher costs and has warned of losses in the quarter of 2012 after reporting a bigger than expected loss in the fourth quarter of last year.
'This is a very surprising acquisition and should be positive to Chalco's share prices as earnings growth in the company's aluminium business is limited and diversifying into coal is a good move,' Robin Tsui, an analyst at BOCI Research said.
Chaclo's total liabilities totalled 99 billion yuan ($15.7 billion) at the end of 2011.
'Chalco is debt heavy but it is a central government-owned company and should have no problem in terms of funding, and have no danger of default,' he added.
Chalco said it will fund its acquisition with internal funds and bank loans. Chinalco owns 12.9 percent stake in Rio Tinto Ltd, which in turn holds 51 percent stake in Canadian miner Ivanhoe Mining. Chinalco is the parent of Chalco.
Canadian and Hong Kong listed SouthGobi mining company is focused on Mongolia. It owns four coal projects in Mongolia and three development projects, the Soumber Deposit, Zag Suuj Deposit and the Ovoot Tolgoi Underground Deposit. In addition, SouthGobi holds mineral exploration licences in Mongolia.
SouthGobi shares jumped 16 percent on Monday to HK$59.50 per share.
($1 = 0.9995 Canadian dollars)
($1 = 6.2980 Chinese yuan)
Aluminium Corp of China Ltd (Chalco) said in a statement on Monday that it will acquire the 57.6 percent stake for C$8.48 per share, a 28.1 percent premium to South Gobi's Friday closing stock price. The Hong Kong price of the offer is HK$65.97, the company said.
Chinese miners are scanning the globe for natural resources to feed the country's fast growing energy needs and Chalco's move to buy control of a Mongolian coal company is part of that strategy. Chalco, China's biggest aluminium maker, has been battling lower metal prices and higher costs and has warned of losses in the quarter of 2012 after reporting a bigger than expected loss in the fourth quarter of last year.
'This is a very surprising acquisition and should be positive to Chalco's share prices as earnings growth in the company's aluminium business is limited and diversifying into coal is a good move,' Robin Tsui, an analyst at BOCI Research said.
Chaclo's total liabilities totalled 99 billion yuan ($15.7 billion) at the end of 2011.
'Chalco is debt heavy but it is a central government-owned company and should have no problem in terms of funding, and have no danger of default,' he added.
Chalco said it will fund its acquisition with internal funds and bank loans. Chinalco owns 12.9 percent stake in Rio Tinto Ltd, which in turn holds 51 percent stake in Canadian miner Ivanhoe Mining. Chinalco is the parent of Chalco.
Canadian and Hong Kong listed SouthGobi mining company is focused on Mongolia. It owns four coal projects in Mongolia and three development projects, the Soumber Deposit, Zag Suuj Deposit and the Ovoot Tolgoi Underground Deposit. In addition, SouthGobi holds mineral exploration licences in Mongolia.
SouthGobi shares jumped 16 percent on Monday to HK$59.50 per share.
($1 = 0.9995 Canadian dollars)
($1 = 6.2980 Chinese yuan)
Previous article
Make Sure Your Aluminium Smelter's Access Control is Up to Scratch with the Help of VHE
Next articleAluminum Demand Continues To Lead Base Metals Pack—BNP Paribas
Grow with
AL Circle
_md.webp)
