China Metal Recycling Limited with Mr Zhu Minyang Secretary of CPC Jiangjin Municipal Committee as witness signed an agreement to acquire 99.68% interest in Jiangyin Port Container Company at a consideration of CNY 220,000,000 and also a cooperative agreement with major banks including Industrial and Commercial Bank of China Jiangyin Branch, Agricultural Bank of China Jiangyin Branch, China Construction Bank Wuxi Branch and Bank of Communications Jiangyin Branch securing credit for a maximum of CNY 3,500,000,000 to support business development on December 29th 2009.
The Group is also pleased to announce that the results of the independent review of CMR internal control conducted by Baker Tilly Hong Kong Business Services Limited an independent professional consultancy firm were sound and positive.
Mr Chun Chi-wai Founder, Chairman and CEO of the Group said "We are very glad to have made another important milestone. We believe the acquisition is one of our strategic assets and will strengthen the position of CMR in Eastern China for advancing business development in the region. As for the agreement with banks, it testifies to the confidence the banking sector has in us and our potential as an industry leader. We will continue to consolidate smaller industry players to facilitate to the sustainable development of the scrap metal recycling industry."
He said that "Looking forward, the Group believes the best of timing, geographical conditions and talents are to work in our favour. With the country pushing forward with building a recycling economy and conserving energy and reducing carbon emissions, presence in the huge Eastern China market and the support of the authority and major banks in the PRC, the Group is confident of capturing the market potentials."
In order to further enhance the Group corporate governance, the Group engaged Baker Tilly on November 24th 2009 to perform an independent review of the internal control mechanisms and procedures maintained by the Company. The results of the independent review by Baker Tilly indicated that the Company's internal control mechanisms and procedures were sound, and no irregularities or material errors were detected during the independent review.
Jiangyin is the one of the transportation and logistics centre in the Yangzi River region. Jiangyin Container is a port services company established in 2001 and is principally engaged in the business of the provision of port services, including warehousing, stevedoring and transportation of goods at the Jiangyin Port. The port under Jiangyin Container is a national type 1 pier, has a shore line of 570 meters, water depth of 15 meter, with an operational area of approximately 170,000 square meters and an annual handling capacity of approximately 5 million tonnes. The acquisition will provide the Group with an exclusive port to serve as a regional logistic and distribution hub supporting the Group's recycling bases in the Jiangsu region. This substantially improves the Company's operational efficiency, competitiveness in the region and lowers the transportation costs. Together with the CNY 3.5 billion Bank Credit, the Group's leading positions in the Eastern China can be strengthened.
