omniture

Puda Coal Completes Acquisition of Da Wa and Guanyao Coal Mines in Pinglu County, Shanxi Province

2010-07-06 21:52 1096


TAIYUAN, Shanxi, China, July 6 /PRNewswire-Asia-FirstCall/ -- Puda Coal, Inc. (NYSE Amex: PUDA), a supplier of high grade metallurgical coking coal used to produce coke for steel manufacturing in China and a consolidator of twelve coal mines in Shanxi Province, today announced that Shanxi Puda Coal Group Co. Ltd ("Shanxi Coal"), a 90% subsidiary of Puda Coal, closed the mining asset transfers with Pinglu County Da Wa Coal Industry Co., Ltd ("Da Wa Coal") and Pinglu County Guanyao Coal Industry Co., Ltd ("Guanyao Coal") on June 25, 2010, representing an aggregate purchase price of $41.7 million.

Pursuant to the Da Wa Coal Agreement, Shanxi Coal will pay Da Wa Coal an aggregate purchase price of $27.8 million in cash, of which approximately $6.8 million is for the tangible assets and approximately $21.0 million for the mining rights and compensation to Da Wa Coal. The first installment of $4.2 million to Da Wa Coal was settled within three days of the execution of the Da Wa Agreement. The second installment of $18.1 million was paid on June 25, 2010, after the registration and ownership certificates of the mining rights and land and property deed were transferred to Shanxi Coal. The remaining purchase price of $5.6 million will be settled upon the one year anniversary of the completion of the transfer.

Pursuant to the Guanyao Agreement, Shanxi Coal agreed to pay Guanyao Coal an aggregate purchase price of $13.9 million in cash, of which approximately $5.5 million is for the tangible assets and approximately $8.4 million for the mining rights and compensation of Guanyao Coal. The first installment of $2.1 million to Guanyao Coal was carried out within three days of the execution of the Guanyao Agreement and the second installment of $9.1 million was paid on June 25, 2010, after the registrations and ownership with respect to the mining rights and land and property deed were transferred to Shanxi Coal. The remaining balance of $2.8 million will be executed upon the one year anniversary of completion of the transfer.

The Yunchen municipal coal mine authority has approved Da Wa Coal and Guanyao Coal to proceed with mine improvements at their current capacity level.

"The closings of the asset transfers of Da Wa and Guanyao coal mines mark an important milestone in our coal consolidation projects," commented Mr. Liping Zhu, President and CEO of Puda Coal, Inc. "We are diligently negotiating with the owners of the remaining six coal mines and anticipate reaching agreements with them in the near future. We remain in close contact with the Shanxi government to receive additional approvals to fully proceed with our plans to consolidate the eight coal mines in Pinglu County, as well as the four coal mines in Huozhou County." said Mr. Liping Zhu, President and CEO of Puda Coal.

About Puda Coal, Inc.

Puda Coal, through its subsidiaries, supplies premium high grade metallurgical coking coal used to produce coke for steel manufacturing in China. The Company currently possesses 3.5 million metric tons of annual coking coal capacity. The Company has recently moved upstream into coal mining, as a consolidator and acquirer of coal mines in Shanxi Province, including the Pinglu projects and the Jianhe projects. On September 30, 2009, Shanxi Coal, a 90% indirect subsidiary of the Company, was appointed by the Shanxi provincial government as an acquirer and consolidator of eight thermal coal mines located Pinglu County in southern Shanxi Province. Shanxi Coal plans to consolidate the eight coal mines into five, increasing their total annual capacity from approximately 1.6 million to 3.6 million metric tons. Shanxi Coal received another approval by the Shanxi provincial government to consolidate four additional coking coal mines into one coal mine in Huozhou County. After the completion of the consolidation, the Jianhe project is expected to increase the total annual capacity from 720,000 metric tons to 900,000 metric tons, according to the Shanxi provincial government's approval. For more information, please visit http://www.pudacoalinc.com .

FORWARD-LOOKING STATEMENTS

The information contained herein includes forward-looking statements. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. For example, our ability to acquire and consolidate the target coal mines are subject to, among other things, the risks and uncertainties relating to the market and geological condition, due diligence, negotiation for definitive agreements, etc. which are beyond our control, as well as our management's ability and capacity to execute our coal mine acquisition strategy and manage the coal mine operations. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

For more information, please contact:

Investor Relations Contact:

Crocker Coulson, President

CCG Investor Relations

Tel: +1-646-213-1915

Email: crocker.coulson@ccgir.com

Elaine Ketchmere, VP of Financial Writing

Tel: +1-310-954-1345

Email: elaine.ketchmere@ccgir.com

Web: http://www.ccgirasia.com

Company Contact:

Laby Wu, Chief Financial Officer, Director of Investor Relations

Puda Coal, Inc.

Tel: +86-10-6439-2405

Email: labywu@gmail.com

Web: http://www.pudacoalinc.com

Source: Puda Coal, Inc.
Related Stocks:
AMEX:PUDA
collection