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Sino Prosper SG 0766
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| Chairman |
LEUNG Ngai Man |
| Issued Capital (Shares) |
6,760M |
| Par Value (HKD) |
0.010 |
| Market Capitalization (HKD) |
1,217M |
| Corporate Profile |
The principal activities are investment holding investment in energy and natural resources related projects and investment in production of raw materials for power generation and construction of highways in the People’s Republic of China (“PRC”) and other countries.
Business Review - For the year ended March 31 2010
The Group has been transforming to focus on the mining and production of precious metals in China. The Group is paving its way of becoming a major Chinese precious metals producer with significant expansion and exploration potential. The following sets out briefly the progress of the projects.
CNPC Sino Prosper Petroleum and Gas Company Ltd (“CNPC”)
CNPC a 95%-owned subsidiary of the Group is principally engaged in the wholesale and commission agency of fuel oil and related supporting and consultation services in the PRC. During the year ended 31 March 2010 a total of approximately RMB1.4 million was further injected by the joint venture parties as part of CNPC’s entire registered capital of RMB50 million. Up to 31 March 2010 an aggregate of RMB13.5 million was injected by the joint venture parties. During the year ended 31 March 2010 CNPC recorded a turnover of approximately RMB20.9 million (equivalent to approximately HK$23.7 million).
Hainan Tairui Mining Development Company Limited (“Hainan Tairui”)
Hainan Tairui a 95%-owned subsidiary of the Group has the requisite licence for processing of minerals and the mining smelting as well as the sales of ferrous and non-ferrous products in the PRC. Due to the economic downturn since late 2008 customers’ demands for industrial metals generally dropped. The sales teams therefore suspended the trading of industrial metal and commenced to explore business opportunity in trading of other ferrous and non-ferrous products.
Proposed Investment and Termination of Investment in Iron Mines Project in Hebei Province PRC
On 10 June 2008 (a date which falls before the commencement of the Reporting Period) Sino Prosper Minerals Investment Limited (the “Purchaser”) a wholly-owned subsidiary of the Group entered into an acquisition agreement (“2008 Acquisition Agreement”) (and supplemented by a supplemental agreement dated 27 August 2008) with Mr. Leung Ngai Man (the “Vendor” or “Mr. Leung”) an executive Director and a substantial shareholder of the Company for the acquisition of amongst other Agortex Development Limited (“Agortex”) at a total consideration of RMB230 million (equivalent to approximately HK$258 million).
The sole asset of Agortex was the entire issued share capital of Fordtec Investment Limited which in turn owned 中連盈(大連)實業有限公司 (Zhonglianying (Dalian) Industry Co. Ltd.) (“WFOE”).
Under the 2008 Acquisition Agreement the acquisition would only be completed conditional upon amongst others the obtaining of a valuation report showing the value of the project of WFOE comprising a mining portion an exploration portion and a product processing portion to be not less than RMB370 million.
The Vendor is a connected person by virtue of him being a Director and a substantial shareholder of the Company. As such the acquisition constituted a connected transaction of the Company under Chapter 14A of the Listing Rules. The acquisition also constituted a very substantial acquisition of the Company under Chapter 14 of the Listing Rules.
On 8 May 2009 before the despatch of any circular to shareholders concerning the 2008 Acquisition Agreement the Company received a letter from an independent valuer which stated that the worth of the project of WFOE would be significantly lower than the estimation made in 2008. After careful consideration the Directors (including the independent non-executive Directors) were of the view that it would not be in the interest of the Company to pursue the 2008 Acquisition Agreement. The Vendor and the Purchaser thus entered into a termination deed whereby the Purchaser and the Vendor had mutually agreed to terminate the 2008 Acquisition Agreement with effect from 11 May 2009.
Investment in Zhongyi Weiye Copper and Gold Mines Project in Heilongjiang Province PRC
On 17 April 2009 Sino Prosper (States Gold) Investment Limited (the “Purchaser SG”) a whollyowned subsidiary of the Group entered into an acquisition agreement (“2009 Acquisition Agreement”) with Mr. Leung for the acquisition (“2009 Acquisition”) of Nice Think Group Limited a company incorporated in the British Virgin Islands (“Target BVI”) and the indebtedness owing by Target BVI to the Vendor on or prior to completion of the 2009 Acquisition at a total consideration of RMB360 million (equivalent to approximately HK$409.1 million) (after adjustment). Part of the consideration in the sum of RMB120 million (equivalent to approximately HK$136.4 million) was agreed to be settled by Purchaser SG procuring the Company to issue convertible bonds to the Vendor and the remaining consideration of RMB240 million (equivalent to approximately HK$272.7 million) was agreed to be settled by Purchaser SG (or the Company) issuing a two-year 1.5% per annum promissory note to the Vendor.
The sole asset of Target BVI is the entire issued capital of Victor Bright Investment Limited a company incorporated in Hong Kong (“Target HK”) which owns 65% of the registered and paid up capital of 黑龍江中誼偉業經貿有限公司 (Heilongjiang Zhongyi Weiye Economic & Trade Co. Ltd) (“Zhongyi Weiye”). Zhongyi Weiye is the holder of the exploration permits of three mines in the PRC (referred to as “Target Mine No. 1 Target Mine No. 2 and Target Mine No. 3”). The predominant resources in Target Mine No. 1 Target Mine No. 2 and Target Mine No. 3 are various kinds of metals including copper and gold.
As all conditions precedent to completion of the 2009 Acquisition Agreement were fulfilled the 2009 Acquisition was completed on 30 September 2009. Accordingly Target BVI has become a whollyowned subsidiary of the Company. At completion the consideration was settled by the issue to the Vendor of (i) a two-year 1.5% per annum promissory note in the principal amount of RMB240 million and (ii) the convertible bonds (which carry among other rights the right to convert the convertible bonds into shares of the Company at the initial conversion price of HK$0.075 per conversion share) in the aggregate principal amounts of HK$136363636.
Mr. Leung is a connected person by virtue of him being a Director and a substantial shareholder of the Company. As such the 2009 Acquisition constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. The 2009 Acquisition also constitutes a very substantial acquisition of the Company under Chapter 14 of the Listing Rules. It was approved by independent Shareholders at the extraordinary general meeting held on 25 September 2009.
On 27 October 2009 Zhongyi Weiye obtained additional exploration permits of two copper and polymetal mines. These two mines are located in Xinancha Hulin City Heilongjiang Province the PRC and Sanchalu Hulin City Heilongjiang Province the PRC respectively with area of approximately 76.12 square kilometers and 92.18 square kilometers respectively. Taking into account the exploration permits of three mines originally held by Zhongyi Weiye Zhongyi Weiye then became a holder of exploration permits of a total of 5 mines with total mining area of approximately 364.61 square kilometers.
The Company confirms that in connection with the 2009 Acquisition it has complied with the applicable requirements under Chapter 14A of the Listing Rules.
Source: Sino Prosper SG (00766) Annual Results Announcement |
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Copyright 1999-2001 SHK Financial Data Limited
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Last Updated: 30 Jul 2010
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