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Chalco to buy 29.9% stake in Winsway Coking Coal
By Richard Fu |
April 24, 2012, Tuesday
|
Online Edition
Online Edition
ALUMINUM Corp of China Ltd, or Chalco, has agreed to buy a 29.9 percent stake in Hong Kong-listed Winsway Coking Coal Holdings Ltd for HK$2.39 billion (US$308 million) to become its largest shareholder.
The deal marks a further step by Chalco to diversify into other assets like coal and iron ore to counter slumping earnings in the aluminum business. Chalco is China's largest aluminum producer.
Chalco agreed to pay HK$2.12 a share for the stake, the Beijing-based company said in a statement yesterday. Winsway is engaged in importing coking coal from Mongolia.
The acquisition will help Chalco strengthen its downstream logistics operations and integrate its other investments in the coal sector, China International Capital Corp analyst Cai Hongyu wrote in a note today.
Earlier this month, Chalco said it agreed to pay US$926 million for a controlling stake in Mongolia-focused coal miner SouthGobi Resources Ltd, which is listed in Toronto. But the deal suffered setback when the Mongolian government suspended SouthGobi's exploration and mining licenses in that country.
Chalco's offer price for Winsway represents a 22.5 percent premium over its Friday close. Winsway shares surged almost 9 percent yesterday before the announcement.
The deal marks a further step by Chalco to diversify into other assets like coal and iron ore to counter slumping earnings in the aluminum business. Chalco is China's largest aluminum producer.
Chalco agreed to pay HK$2.12 a share for the stake, the Beijing-based company said in a statement yesterday. Winsway is engaged in importing coking coal from Mongolia.
The acquisition will help Chalco strengthen its downstream logistics operations and integrate its other investments in the coal sector, China International Capital Corp analyst Cai Hongyu wrote in a note today.
Earlier this month, Chalco said it agreed to pay US$926 million for a controlling stake in Mongolia-focused coal miner SouthGobi Resources Ltd, which is listed in Toronto. But the deal suffered setback when the Mongolian government suspended SouthGobi's exploration and mining licenses in that country.
Chalco's offer price for Winsway represents a 22.5 percent premium over its Friday close. Winsway shares surged almost 9 percent yesterday before the announcement.
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