Global Ferronickel inks $75-M China ore processor buy-in deal
Mining firm Global Ferronickel Holdings Inc. (FNI) has gained a foothold in China’s ore processing industry by acquiring 20 percent of nickel alloy enterprise Guangdong Century Tsingshan Nickel Industry Co. Ltd. (GCTN) for $75 million.
FNI, in a regulatory filing on Monday, said it had signed the definitive agreement to buy 22.22 percent of GHGC Holdings Ltd. (GHL), a British Virgin Islands holding company that in turn owns 90 percent of GCTN. FNI bought the stake from its directors Joseph Sy and Gu Zhi Fang.
The deal gives FNI an indirect 20 percent stake in GCTN, which operates in a 33-hectare area with more than 600 employees.
“The acquisition is expected to create reliable and consistent synergies between FNI as a nickel ore supplier and GCTN as a value-added processor, and support our ongoing diversification projects to boost profitability,” said FNI president Dante Bravo.
GCTN’s plant utilizes rotary kiln technology, which can feed up to four furnaces. At present, the rotary kiln feeds three furnaces and can produce about 28,000 tons of pure nickel.
The acquisition price of $75 million, or about P4.4 billion, will be paid by offsetting receivables amounting to $23.2 million (P1.4 billion) while the balance of $51.8 million (P3.1 billion) will be settled in cash installments of $10 million annually until fully paid.
Article continues after this advertisementGCTN services customers at Guangdong’s Economic and Technological Development Zones and abroad. Its subsidiary, Yangjiang Zichen Port and Logistic Ltd Co., is located near Yangjiang Harbour in Hailing Cove area.
FNI’s affiliate, Ipilan Nickel Corp., is already exporting nickel ore to GCTN.
