Tongli Cement Major Shareholder Intends To Acquire 60.15% Stake In Southern Henan Cement

On the evening of December 10th,

Since the main business of the two companies in Henan is highly consistent, the competition between Tongli cement and major shareholders will be inevitable after the paction.

The reason why the big shareholders first bought is because the South Henan cement has been losing money for nearly three years.

The announcement shows that the capacity of Henan Henan cement production line is 930 tons of daily clinker and 440 thousand tons of cement per year.

In 2008, 2009 and 2010 1-9, Henan cement lost 26 million 960 thousand yuan, 18 million 610 thousand yuan and 17 million 300 thousand yuan respectively.

Henan investment group, a controlling shareholder of Tongli cement company, promised that after the completion of the acquisition, South Henan cement will be handed over to the trusteeship of the listed company immediately, and the competition of the listed companies will be completely eliminated through equity pfer, asset sale and change of main business by the end of 2013.

Tongli cement said that the limestone mine in Zhumadian has been owned by two companies, the company's controlling subsidiary, Yulong Tongli and Henan South cement. After the completion of the purchase, Yulong Tongli will strengthen the control of limestone resources in the area. The company will make overall arrangements for Henan Henan cement and Yulong Tongli market by trusteeship, which will improve the market share and control power of Yulong Tongli products.

In 2010, the competition in Henan cement market was fierce, and the gross profit rate of cement products decreased.

Tongli cement achieved a net profit of 42 million 410 thousand yuan in the first three quarters, a decrease of 52% over the same period last year.

Tongli cement closed at 11.53 yuan per share in December 10th, up 5.10%.