Minco Silver acquires stake in Chinese cement company Sichuan Hexie Shuangma
By Adriano Marchese
Canada-based silver mining company Minco Silver Corp. announced Wednesday that it will acquire a less than 1% stake in Chinese cement maker Sichuan Hexie Shuangma Co., using excess cash it won’t need in the near future.
Minco said its China-based subsidiary Minco Mining (China) Co. has entered into a transfer agreement and will acquire a stake in Tianjin Saikehuan Enterprise Management Center LP from Tianjin Huaxin Anneng Management Consulting Partnership LP for 119,762,699 Chinese yuan the equivalent of 16.6 million dollars.
Saikehuan LP’s primary asset is an approximately 25% interest in Hexie, and Minco’s interest in Saikehuan gives it an indirect interest of approximately 7.5 million shares, or 0.98% of Hexi’s total outstanding shares.
Minco will pay the consideration solely from its excess working capital and said it represents an opportunity to generate a higher return than traditional bank investments.
She added that she doesn’t expect to need this capital for other purposes any time soon.
Minco said it also entered into a reorganization and distribution agreement with Saikehuan LP and its general partner to make Minco China a direct holder of Hexi shares, with the right to trade those shares directly on Saikehuan LP’s behalf.
Through this agreement, Minco expects to recover its entire purchase price from the proceeds from the sale of Hexi shares and then distribute the remaining profit sharing 20% to the general partner and 80% to Minco China.
Write to Adriano Marchese at [email protected]