Shenzhen-listed Hebei Jinniu Energy Resources Co Ltd (JNNY) today announced that it will acquire a 76% stake in its subsidiary in Shouyang county of Shanxi Province, sources reported.
According to the announcement, JNNY will spend RMB 450 million in cash to fund the acquisition, in a move to help improve the company's profitability and to maintain stable business growth.
The Shouyang-based subsidiary has an annual output of 900,000 tons of coal and realized operating income of RMB 423 million and net income of around RMB 72.87 million in 2008.
Moreover, JNNY signed a raw material procurement protocol with HeBei Jinniu Chemical Industry Co Ltd<600722>. JNNY will sell an estimated RMB 60 million in coal and RMB 730 million in raw material to the latter company in 2009.