Minmetals Resources Limited (MMR) (HKSE: 1208) today announced it had entered into an agreement for the sale of its trading, fabrication and other businesses.
- Minmetals Resources Limited announced its intention to divest its trading, fabrication and other business in March 2011.
- The Directors announce that today MMR has entered into a sale agreement with China Minmetals Nonferrous Co., Ltd for the purchase of these assets.
- The sale assets include MMR’s interests in Minmetals Aluminium, North China Aluminium, Yingkou Orienmet and Changzhou Jinyuan.
- The total agreed sale price for the assets is US$726.8 million.
- The sale is conditional on regulatory and independent shareholder approvals.
- MMR will seek approval from its independent shareholders at an extraordinary general meeting on or about 28 October 2011.
“MMR is moving forward with the next stage of its strategic business transformation with the signing today of this sale agreement,” said Mr Andrew Michelmore, Executive Director and Chief Executive Officer of MMR.
“We are pleased to deliver this sale agreement to our initial timeline and take this important step toward another significant milestone in our business strategy,” he said.
“Proceeds from this sale, when combined with funds generated from the continuing operations, will substantially strengthen MMR’s balance sheet further building MMR’s substantial firepower available for future growth”, he said.
The assets to be sold include MMR’s 100% equity interest in Minmetals Aluminium for US$667.3 million, 72.80% equity interest in North China Aluminium for US$29.6 million, 51% equity interest in Yingkou Orienmet for US$2.9 million and 36.2913% equity interest in Changzhou Jinyuan for US$27.0 million.
The total agreed sale price for the assets is US$726.8 million.
The sale price has been arrived at after arm’s length negotiations between Minmetals Resources Limited and China Minmetals Nonferrous Co., Ltd.
When determining the sale price the parties took into consideration a range of valuation measures. Importantly the sale price exceeds the total net asset value of the sale entities, as at 30 June 2011, as adjusted for cash and debt and the original purchase costs. In addition the sale price is close to the top of the range of the MMR market capitalisation prior to the announcement of the intention to acquire MMG. Somerley Limited has been appointed by the Company as its independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.
“The sale will complete another key stage in our business transformation and refocus MMR as a diversified upstream base metals company ready for growth,” said Mr Michelmore.
MMR will seek the approval of its independent shareholders with the despatch of a circular on or about 12 October 2011 for a shareholder vote at an extraordinary general meeting on or about 28 October 2011. The circular will contain further details of the sale agreement, a letter of advice from the independent financial adviser, Somerley Limited, and recommendation of the Independent Board Committee.
For more information see the detailed announcement to the Hong Kong Stock Exchange or visit www.minmetalsresources.com or www.mmg.com