LONDON (Alliance News) - Hong Kong-based recyclable metal trader Zibao Metals Recycling Holdings PLC on Monday said it has agreed to buy a non-ferrous metal processing and stockholding yard in Nanhai, China, for CNY25 million in shares.
Following the completion of the deal the vendors of the stockholding yard will have a 20% interest in Zibao via an investment holding company. The shares are subject to a lock-in period of two years, Zibao said. It didn't specify the number of shares that would be issued, but Zibao currently has 97.25 million shares in issue, suggesting about 20 million shares are being issued.
Shares in Zibao closed up 2.3% at 11.00 pence Monday morning.
Zibao said that, as at the end of July, the stockholding yard had net assets of CNY25.4 million.
Zibao said the acquisition represents the first step in its acquisition strategy which it outlined at its initial public offering last June. The stockholding yard is an area of 60,000 square meters, with buildings with a gross floor area of around 6,064 square meters.
In 2013, the yard produced a profit of CNY300,000 on revenue of CNY113 million. Zibao said the acquisition brings it around twenty customers, reducing its dependency on a limited customer base, and will add around five suppliers to its existing panel.
"I am pleased that within a year of our IPO we have completed the first step in our acquisition strategy to develop Zibao into a significant metals trading group," said Chairman Joe Zhou in a statement.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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