TIDMPMHL
RNS Number : 7673L
Prosperity Minerals Holdings Ltd
15 August 2013
15 August 2013
Prosperity Minerals Holdings Limited
("Prosperity" or "the Company")
Update on Master Iron Ore Off-take Agreement
Prosperity Minerals Holdings Limited (PMHL.L) is an iron ore
trader/operator and real estate owner/developer in the People's
Republic of China (PRC). Reference is made to the announcement on
16 May 2013 regarding the conditional renewal of its Master
Off-take Agreement (the "New Master Off-take Agreement") with Grace
Wise Pte Limited ("Grace Wise") for purchasing iron ore from
Malaysia. Consistent with the previous agreement, Prosperity will
benefit from the right, but not the obligation, to purchase iron
ore from Grace Wise at the prevailing market price for the
region.
On 15 August, Prosperity and Grace Wise conditionally entered
into a deed of amendment under which the maximum value of
transactions will now be US$ 863 million over the three fiscal
years, from 1 April 2013 through 31 March 2016. The value was
previously US$ 1.1 billion and the proposed amendment reflects the
decrease in iron ore prices in the year to date.
The Company's Chairman and CEO, David Wong, is indirectly
interested in 70% of Grace Wise. Mr Wong is also Chairman and CEO
of the Company's majority shareholder, Prosperity International
Holdings (H.K.) Limited ("PIHL"), which is listed on the Hong Kong
Stock Exchange. As required by the Hong Kong Listing Rules,
completion of the New Master Off-take Agreement and the deed of
amendment are conditional upon PIHL obtaining the approval of its
independent shareholders ("PIHL Independent Shareholders"). Prior
to obtaining such shareholder approval, Prosperity may enter into
transactions with Grace Wise up to a maximum limit of US$ 11
million per annum, as permitted by the Hong Kong Listing Rules.
In addition, Rule 14A.35(2) of the HK Listing Rules requires
PIHL to cap the value of its annual transactions with Grace Wise.
As the actual value of the transactions between Prosperity and
Grace Wise varies depending on the prevailing market price of iron
ore at the relevant delivery time, it is not possible to determine
at this stage the maximum annual cap for each of the fiscal years
between 2013 and 2016.
Nonetheless, in order to comply with the relevant requirements
of the HK Listing Rules, PIHL has agreed, with Prosperity and Grace
Wise, to cap the annual value of their transactions at the volumes
set out below (the "Annual Caps").
Year ending Year ending Year ending
31 March 31 March 31 March
2014 2015 2016
US$ millions US$ millions US$ millions
Annual 60(a) and
Cap (d) 343(b) 460(c)
Assumptions:
(a) 0.6 million metric tonnes of iron ore at US$ 100 per metric
tonne during the remaining period for the year ending 31 March
2014;
(b) 3.43 million metric tonnes of iron ore at US$ 100 per metric tonne;
(c) 4.6 million metric tonnes of iron ore at US$ 100 per metric tonne; and
(d) Until PIHL Independent Shareholders' approval is obtained,
the Annual Cap is US$ 11 million.
PIHL's circular to its shareholders regarding the New Master
Off-Take Agreement has been delayed but will be issued on or before
30 September 2013. This document will also incorporate the latest
proposed amendment.
As and when PIHL issues its circular to shareholders, the
Company will update its shareholders.
Unless otherwise specified, capitalised terms used in this
announcement have the same meaning as those defined in the
announcement on 16 May 2013.
PIHL's announcement to the HKSE can be found on the website
below:
http://www.pihl-hk.com/html/ir_announce.php
Enquiries:
Prosperity Minerals Holdings Limited +852 3187 2618
Patrick Li
Neelke Kruger-Logan
Citigate Dewe Rogerson +44 (0) 20 7638 9571
Martin Jackson
Priscilla Garcia
Daniel Stewart & Company plc +44 (0) 20 7776 6550
Corporate Finance: Paul Shackleton, Antony Legge,
Emma Earl
Corporate Broking: Martin Lampshire
Notes to Editors:
Prosperity (AIM: PMHL) is:
- an iron ore trader and operator serving the PRC;
- a specialised real estate owner and developer in the same
market; and
- an investor in two cement plants, also in the PRC.
Prosperity's iron ore trading business has been operating since
1992 and sources iron ore, for shipment and use in the PRC, from
major international iron ore producers in South Africa, Brazil,
Australia and South East Asia, Thailand and Malaysia in particular.
The majority of the Company's iron ore is sold to large steel
manufacturers in the PRC. In the fiscal years ended 31 March 2012
and 2013, Prosperity shipped 4.8 million tonnes and 2.8 million
tonnes of iron ore respectively.
In December 2010, Prosperity acquired a 35% effective interest
in United Goalink Limited (UGL), a Brazilian mining operation which
owns approximately 600 square kilometres of exploration rights and
3 square kilometres of mining concession in the State of Ceará in
the north east of the country. In the year ended 31 March 2013, UGL
shipped 111,490 tonnes of iron ore (which is included in the above
tally).
Prosperity's real estate investment and development division is
focused on creating an attractive portfolio of PRC property and
development assets. The Company has entered into a number of
agreements with partners to develop residential, commercial and
recreational projects principally in Guangzhou City and Changzhou
City in the southern PRC. Prosperity also owns an interest in an
existing commercial building in Guangzhou, which is a regional
capital and is located in the Pearl River Delta, the foremost
economic zone in the southern PRC.
Prosperity has two associate investments in the cement
manufacturing industry in the PRC. The Company holds a 33.06%
interest in Anhui Chaodong Cement Company Limited (ACC), located in
Anhui Province in the eastern PRC. The designed sellable production
capacity of ACC is 6 million tonnes of cement and clinker per
annum. In addition, Prosperity owns 16.11% of TCC Liaoning Cement
Company Limited which has a designed saleable production capacity
of 2 million tonnes of cement and clinker per annum. As announced
on 6 February 2013, this latter shareholding is the subject of a
conditional sale and purchase agreement.
The PRC is the World's second largest economy (behind the US)
and the biggest buyer of iron ore; it is also the largest producer
and consumer of cement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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