SINGAPORE- Coal transporter Manhattan Resources has agreed to acquire mining firm Singxin Resources for $1 billion, in its first foray into China's mineral mining industry.
This will be paid for in full by issuing new shares in Manhattan. The original owners of Singxin will end up with 73 per cent of Manhattan's enlarged share capital, the firm said in a statement filed with the Singapore Exchange on Thursday.
If the acquisition is successful, Manhattan will offer a one-for-one bonus issue of about 1.9 billion warrants at $1 apiece for existing shareholders.
"This latest proposed acquisition offers a chance for the company to acquire a new business which will in turn provide it with a potential growing revenue stream and enable the company to diversify its operations and build a sustainable business," said Mr David Low, chief executive and managing director of Manhattan.
The move will also allow the firm, which provides logistics, marine transportation and supporting services to the mining industry, to "foray into the potentially lucrative mineral mining industry" and access exploration activities in Xinjiang, added the Singapore-listed company.
As part of the deal, a restructuring exercise will be undertaken in which Singxin will own 70 per cent of Giant Miner, an investment holding company.
Giant Miner will in turn own 100 per cent of China-based mining company, Urumqi Jinshi Huilong Mining Co, which currently holds mining exploration permits in three concession areas covering a total of 26.99 square kilometres in Xinjiang.
Minerals in the concession area uncovered include chrome, serpentine and magnesia.
Serpentine is a mineral that can be used to produce either magnesia (magnesium oxide) or magnesium (metal).
Magnesia is versatile and has wide industrial applications and is used in a number of industrial applications such as fertilisers, pharmaceuticals and construction.