* Chinalco offering nearly 29% premium to South Gobi’s HK
listed shares
* Chalco shares fall 1.6pct, SouthGobi shares jump 16 pct
(Adds details, background, analyst comment)
HONG KONG, April 2 (Reuters) – China’s aluminum producer
Chalco has agreed to buy Ivanhoe Mining Ltd’s
controlling stake in Mongolian-focused coal miner SouthGobi
Resources for $926 million, as the Chinese state
company diversifies into other resources in the face of tough
aluminium market.
Aluminium Corp of China Ltd (Chalco)
said in a statement on Monday that it will acquire the 57.6
percent stake for C$8.48 per share, a 28.1 percent premium to
South Gobi’s Friday closing stock price. The
Hong Kong price of the offer is HK$65.97, the company said.
Chinese miners are scanning the globe for natural resources
to feed the country’s fast growing energy needs and Chalco’s
move to buy control of a Mongolian coal company is part of that
strategy. Chalco, China’s biggest aluminium maker, has been
battling lower metal prices and higher costs and has warned of
losses in the quarter of 2012 after reporting a bigger than
expected loss in the fourth quarter of last year.
“This is a very surprising acquisition and should be
positive to Chalco’s share prices as earnings growth in the
company’s aluminium business is limited and diversifying into
coal is a good move,” Robin Tsui, an analyst at BOCI Research
said.
Chaclo’s total liabilities totalled 99 billion yuan ($15.7
billion) at the end of 2011.
“Chalco is debt heavy but it is a central government-owned
company and should have no problem in terms of funding, and have
no danger of default,” he added.
Chalco said it will fund its acquisition with internal funds
and bank loans. Chinalco owns 12.9 percent stake in Rio Tinto
Ltd , which in turn holds 51 percent stake in
Canadian miner Ivanhoe Mining. Chinalco is the parent of Chalco.
Canadian and Hong Kong listed SouthGobi mining company is
focused on Mongolia. It owns four coal projects in Mongolia and
three development projects, the Soumber Deposit, Zag Suuj
Deposit and the Ovoot Tolgoi Underground Deposit. In addition,
SouthGobi holds mineral exploration licences in Mongolia.
SouthGobi shares jumped 16 percent on Monday to HK$59.50 per
share.
($1 = 0.9995 Canadian dollars)
($1 = 6.2980 Chinese yuan)
(Reporting by Alison Leung and Denny Thomas; Editing by Michael
Flaherty)
