Attached files
file | filename |
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8-K - Puda Coal, Inc. | v200721_8k.htm |
EX-10.1 - Puda Coal, Inc. | v200721_ex10-1.htm |
EX-10.2 - Puda Coal, Inc. | v200721_ex10-2.htm |
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
Investor
Relations Contact:
Crocker
Coulson, President
CCG
Investor Relations
Tel: +1-646-213-1915
Email:
crocker.coulson@ccgir.com
|
Elaine
Ketchmere, Partner
Tel: +1-310-954-1345
Email:
elaine.ketchmere@ccgir.com
Web: www.ccgirasia.com
|
FOR IMMEDIATE
RELEASE
Puda
Coal Signs Agreements to Acquire Additional Coal Mines under Pinglu Project
Phase II
TAIYUAN, SHANXI PROVINCE,
China, November 3, 2010 – Puda Coal, Inc. (NYSE Amex: PUDA) (“Puda Coal”
or the “Company”), 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, entered into separate coal
mining rights and mining assets transfer agreements with two coal mines located
in Pinglu County, Shanxi Province, on October 28, 2010, Shanxi Pinglu Renling
Coal Industry Ltd. (“Renling Coal”) and Pinglu County Donggou Coal Mine
(“Donggou Coal”).
Pursuant
to the agreement with Renling Coal, Shanxi Coal will pay Renling Coal an
aggregate purchase price of RMB 205,000,000 (approximately $30.65 million) in
cash, of which RMB 38,830,000 ($5.80 million) is for Renling Coal’s tangible
assets and RMB 166,170,000 ($24.85 million) is for the mining rights of and
compensation to Renling Coal.
Pursuant
to the agreement with Donggou Coal, Shanxi Coal will pay Donggou Coal an
aggregate purchase price of RMB 77,500,000 (approximately $11.59 million) in
cash, of which RMB 9,130,000 ($1.37 million) is for Donggou Coal’s tangible
assets and RMB 68,370,000 ($10.22 million) is for the mining rights of and
compensation to Donggou Coal.
Under
each agreement, Shanxi Coal agrees to pay 50% of the purchase price within three
days of signing, 40% of the purchase price within 30 days after assets transfer
is completed and the mining permits and property deeds are transferred, and the
remaining 10% of the purchase price six months after the mining permits and
property deeds are transferred.
Pursuant
to the above agreements, Renling Coal and Donggou Coal will be responsible for
canceling or terminating their respective employment contracts (or labor
relationships) with their staff, paying all unpaid wage, premium and welfare
expenses, and bearing all of the expenses caused by the cancellation or
termination of the employment contracts.
Shanxi
Coal plans to place all the purchased assets of Renling Coal and Donggou Coal
into Shanxi Pinglu Dajinhe Jinyi Coal Industry Co., Ltd., a newly established
project company approved by the Shanxi provincial government, which is one of
the three project companies to be set up by Shanxi Coal as Phase II of the
Pinglu Project.
Phase II
of the Pinglu Project will be co-developed by Shanxi Coal, Mr. Zhao Ming and Mr.
Gao Jianping (the “Co-Investors”) based on the Investment Cooperation Agreement
signed on August 1, 2010, pursuant to which Shanxi Coal, Mr. Ming Zhao and Mr.
Jianping Gao will contribute 40%, 30% and 30%, respectively, of the total
investment needed for the consolidation and construction of Phase II of the
Pinglu Project.
The
Co-Investors authorized Shanxi Coal to manage Phase II of the Pinglu Project.
The Renling Coal and Donggou Coal mining assets acquisition, as well as the
subsequent project company construction, will be developed by the
Co-Investors.
Upon
completion of the transfer of the mining rights and mining assets under the
above agreements, Shanxi Coal plans to close down Donggou Coal and consolidate
its underground coal reserves into Renling Coal, which will undergo
improvements and construction to increase the designed annual capacity of the
two coal mines from the current aggregate annual capacity of 450,000 metric tons
to 900,000 metric tons. The Company expects to complete the consolidation and
restructuring within twelve months after the closing of the asset
acquisitions. Renling Coal and Donggou Coal have high quality thermal
coal reserves and the underground coal reserves are intact and easy to
explore.
“Our
Pinglu Project Phase II continues to gain momentum as we have entered into
definitive agreements to purchase four coal mines to be consolidated as part of
Phase II,” commented Mr. Liping Zhu, CEO of Puda Coal, “We become increasingly
confident in our ability to manage the coal mine consolidation process as we
transform Puda Coal into an integrated coal washing and coal mining company. We
believe our vertically integrated operations will further mitigate our operating
risks, diversify our revenue sources and enhance our operating
margin.”
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, the closing of the transactions contemplated under each
coal mine acquisition agreement is subject to various closing conditions, and
the anticipated annual capacity of the acquired coal mines will be subject to
risks and uncertainties relating to market and geological conditions as well as
our management’s ability to operate and manage the coal mines. 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.
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