China-based construction and civil engineering firm Sino Construction is planning an all-share takeover bid for an Australia-listed mineral resources firm.
Singapore-listed Sino yesterday announced plans to buy Guildford Coal, which has coal-mining projects in Queensland, Australia, as well as in Mongolia.
In July, Sino unveiled plans to buy Guildford's Australian coal assets but, now, it is proposing to buy the whole company.
Guildford's Mongolian assets include the Baruun Noyon mine in South Gobi, which started production last month with a first shipment of 8,000 tonnes of coking coal.
The Australian projects have an exploration target of up to 7.17 billion tonnes of coal, said Sino.
The takeover bid will be made at 6.13 Australian cents per Guildford share through an allotment and the issue of one new Sino share for every 4.5 Guildford shares.
Sino originally entered an agreement in July to acquire Guildford's entire portfolio of coal assets in Australia for US$25 million (S$31.7 million) and ongoing royalty payments.
"The management of Sino Construction is now of the view that it is more advantageous to acquire all of Guildford Coal's assets, including its coal-producing assets in Mongolia," Sino said.
Sino noted that the size of Guildford's resources could see it become one of Australia's largest independent miners. Sino plans to retain the management and operational team following the takeover.
The proposed takeover is subject to various conditions, including shareholder approval at an extraordinary general meeting at a date to be announced. The bid would be made within two months, in line with Australian laws.
Sino also announced plans to enter the mineral and energy resources business, and proposed to change its name to Magnum Strategic Resources.
This article was first published on Sep 26, 2014.
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