Coal miner Resources Prima to buy Chinese property developer in reverse takeover

SINGAPORE - Indonesian coal miner Resources Prima Group has entered into a binding memorandum of understanding with Hing Chung Group to fully acquire ChongQing HuangYang Property Development for $33 million in what will result in a reverse takeover of Resources Prima.

ChongQing HuangYang is a China-based property development company. Its assets comprise property units totalling 2,332 square metres in commercial area plus 293 car park lots in a project located in Chongqing. It also owns 90 per cent of SiChuan Dading City Property Management.

The $33 million will be satisfied by the issuance of new ordinary shares in Resources Prima at $0.20 per share, it said in a filing with the Singapore Exchange (SGX).

Catalist-listed Resources Prima is suspended from trading and is required to submit a proposal to the SGX to address financial and business viability issues faced by the company. The group has been operating under severe cash flow constraints since its main operating subsidiary PT Rinjani Kartanegara entered bankruptcy in October last year.

The proposal was due Sept 28; the company plans to write to SGX to seek a further extension of time to enter into an agreement with Hing Chung and to submit the proposal.

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