Datong Coal Industry Co said it plans to sell shares to its parent in exchange for mining and other related assets worth up to 2.5 billion yuan (US$364 million).
The firm will issue as many as 120 million A shares to state-owned parent Datong Coal Mine Group, at 22.08 yuan apiece, or the last 20-day average price, it said in a filing to the Shanghai Stock Exchange yesterday.
Datong's target is Yanzishan mine, which made a net profit of 117 million yuan, or 0.98 yuan per share, last year. In contrast, Datong made a 499-million-yuan profit, or 0.60 yuan a share, the filing said. The acquisition will boost the firm's reserves, output capacity and profitability, Datong said. The deal is subject to shareholder and regulatory approval.
The private placement marks the start of a group listing plan as Shanxi Province-based Datong aims to be the sole coal mining unit under its parent before 2014.
Datong closed at 23.77 yuan on July 14. It fell 10 percent to 21.39 yuan yesterday after trading resumed.
(Shanghai Daily August 12, 2008)
