Hunan Nonferrous hits record on buyout plan
Updated: 2014-12-13 07:47
By Luo Weiteng in Hong Kong(HK Edition)
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Hunan Nonferrous Metals' parent company plans to delist its H-shares for business integration, offering a 68.7-percent premium which triggered the frenzy in morning trading on Friday. Provided to China Daily |
Metal company's stock price soars 51% after parent's privatization move
Hunan Nonferrous Metals Corporation Ltd's (HNC) share price soared to a record high on Friday after announcing that its State-owned parent will buy out all the Hong Kong-listed shares it doesn't own.
The stock surged 51.4 percent to close at HK$3.77 after having gained as much as 61 percent earlier in the day. Trading in the shares of the company, which was listed in the SAR in 2006, had been suspended since Oct 29.
By comparison, Hong Kong's benchmark Hang Seng Index dropped slightly by 0.3 percent to 23,249.20 at the close.
According to HNC's statement to the Hong Kong Stock Exchange on Friday, its parent, Hunan Nonferrous Metals Holding Group, which currently owns 57.4 percent of the company, is offering HK$4.20 per share - a 68.7-percent premium to the stock's last closing price of HK$2.49 before trading was suspended. The buyout of all of the Hong Kong-traded shares of the unit amounts to HK$6.2 billion ($798.4 million).
The parent company has also offered to acquire all of the issued domestic shares at 1.58 yuan each, and plans to privatize the investment holding and mining unit.
The total cost of the two offers is about HK$6.4 billion.
HNC - the mainland's largest producer of non-ferrous metals, excluding aluminum - plans to delist the H-shares and integrate with its parent after the buyout is completed by June next year.
The company said certain businesses of its parent overlap those of its own, citing the tungsten production business as well as the research and development of non-ferrous metals.
"On completion of the privatization and delisting, Hunan Nonferrous Metals Holding Group and the company will be better positioned to eliminate overlaps, align interests and integrate resources", according to the company's statement.
The mainland's Essence Securities said HNC will become the first State-owned company to withdraw from H-share listing status and it's believed the company will return to the A-share market after the takeover.
It said Shenzhen-listed China Tungsten and Hightech Materials (CTHM) and Shanghai-listed Zhuzhou Smelter Group - the mainalnd's biggest zinc producer - both of which are held by Hunan Nonferrous Metals Holding Group, are expected to benefit from the withdrawal.
By virtue of the delisting, China Minmetals, the ultimate parent of the companies, could also fulfill its commitment of capital injection into CTHM two years ago, Essence Securities said.
sophia@chinadailyhk.com
(HK Edition 12/13/2014 page8)