Henan Shenhuo to increase stake in Henan Nonferrous Metals
Shanghai. March 24. INTERFAX-CHINA - Shenzhen Stock Exchange-listed Henan Shenhuo Coal Industry and Electricity Power Co. Ltd. announced on March 23 that it will buy a 22.31 percent stake in Henan Nonferrous Metals Holding Co. Ltd. from Henan Huiyuan Investment Co. Ltd. for RMB 145 million ($21.24 million) and a 30.77 percent stake from its parent company Henan Shenhuo Group Co. Ltd. for RMB 202 million ($29.59 million).
Upon completion of the deal, Henan Shenhuo will hold a total 98.93 percent stake in Henan Nonferrous Metals, according to the announcement.
Henan Shenhuo said that the move is part of its plan to further control Henan Nonferrous Metals' alumina production capacity, to improve its core business and to enhance the company's overall ability to hedge against market risks.
Henan Nonferrous Metals, which is located in Henan Province, invests in coal, electricity, chemicals, mining and nonferrous metals. It has an annual primary aluminum production capacity and annual alumina production capacity of 1.45 million tons and 400,000 tons respectively. It generated a sales revenue of approximately RMB 598 million ($87.6 million) and incurred a net loss of RMB 163 million ($23.88 million) in 2009.
Henan Shenhuo is engaged in coal, mining equipment, aluminum product production and power generation. It has an annual primary aluminum production capacity of 430,000 tons and is now constructing a 250,000-ton aluminum processing facility. The company aims to integrate its coal, electricity and aluminum product sectors.
Henan Shenhuo Group, which is located in Shangqiu City, Henan Province, operates in the coal, power generation, primary aluminum production and processing sectors. It has an annual primary aluminum production capacity of 920,000 tons, aluminum alloy and profile production capacity of 160,000 tons, and high-precision aluminum foil production capacity of 25,000 tons.
-XH