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Feishang announces cash call for acquisition
Posted on Wednesday, 06 December 2017 08:04
Feishang Non-metal Materials Technology is raising HKD 72.50 million (USD 9.28 million) from Zhuang Shibin, who is an individual investor with no affiliation to the company.

Under the terms, the Hong Kong Stock Exchange (HKEX)-listed group is issuing 50.00 million new shares, representing 8.3 per cent of its enlarged capital, at HKD 1.45 each.

While the go-ahead for the capital increase has been granted by shareholders, the deal remains subject to approval from the listing committee of the HKEX.

Incorporated in the Cayman Islands and based in China, Feishang is engaged in the production and wholesaling of bentonite products, such as drilling mud and pelletising clay.

It primarily develops the Anhui province-located Hunahu Bentonite mine, which is an open-pit mine site with permitted mining area of about 7.30 square kilometres.

Feishang posted revenue of CNY 11.46 million in the six months ended 30th June 2017, down 15.9 per cent on the CNY 13.63 million recorded during the same timeframe in the previous year.

However, due to a surge in selling, distribution and administrative expenses, net loss for the period totalled CNY 2.18 million, compared to a net profit of CNY 2.72 million in H1 2016.

With the proceeds, Feishang is planning to acquire a five-storey commercial property in Chaoyang City with total gross floor area of about 1,335.30 square metres.

The asset will be used as an operation office for Chaoyang Bangchuang Longxin Non-Metal Materials, a resources processing and trading joint venture established by Feishang and Jianping County Longxin Gravel.

According to Zephyr, the M&A database published by Bureau van Dijk, globally, there have been 393 announced deals targeting non-metallic mineral mining and quarrying companies since the beginning of this year.

The largest of these was Washington Companies’ USD 1.20 billion acquisition of Canadian diamond mining firm Dominion Diamond, which is expected to close by the end of 2017.

© Zephus Ltd