Under the agreement, China Railway will sell at least part of Xiao Bei Yang Mining Co Ltd (Xiao Bei Yang) and not less than 20 pct of Mang Lai Mining Co Ltd (Mang Lai), as well as its interests in other mining and railway companies in Inner Mongolia, to China Strategic.
China Strategic will pay at least 50 pct of the purchase price in cash, while the remainder will be satisfied by an issue of China Strategic shares.
The consideration amount is yet to be fixed, while the number of consideration shares will be determined based on the average closing price of the stock for a period of 12 months.
Xiao Bei Yang owns a mine in Inner Mongolia with coal reserve of approximately 1.04 bln tonnes, while Mang Lei owns a mine with coal reserve of approximately 993 mln tonnes.
Information on other related assets being acquired was not provided.
At 10:46 am, shares of China Strategic were up 0.07 hkd or 6.36 pct at 1.17, off a high of 1.48; while those of China Railway were down 0.06 hkd or 0.55 pct at 10.78.
(1 usd = 7.80 hkd)