SINGAPORE (Mar 11): China Mining International has aborted a deal to buy a Chinese pomegranate cultivator from its executive chairman Guo Yinghui.
This comes after the long-stop date for the conditional share purchase agreement was not extended.
Signed on July 2018, the deal was for China Mining to acquire a 63.11% in Henan Zhongnong Huasheng Agricultural Science and Technology Co. The purchase was to be satisfied by the issue and allotment of 143.1 million new China Mining shares at 26 cents each or $37.2 million in total.
Under the deal, China Mining had sought a whitewash waiver for shareholders to give up their right to a mandatory general offer from Guo and his concert parties. The group also wanted to change its name to Zhongnong Huasheng International.
The deal was initially scheduled for completion six months later. But on Jan 23, China Mining’s board announced more time was needed to close the deal as “certain diligence matters in relation to the target group's existing operations remain outstanding".
With Monday’s termination notice, the structure of the proposed acquisition is now set to be reconsidered after talks with Guo, says the board.
The board adds it will "make further announcements on any material developments in connection with the above matters as and when appropriate".
China Mining had proposed the acquisition as part of its plans to diversify into the agriculture sector to lower the risk profile of the group.
For the full year ended Dec 31, 2018, the group reported a net loss of $604,000, on revenues of $7.1 million.
Shares in China Mining closed at 24 cents on Monday.
