China Knowledge reported that Hebei Jinniu Energy Resources Co Ltd which is engaged in the development of coal mining and processing, announced on December 26 that it plans to acquire a 72% stake in Erdos based Shengxin Coal Co for CNY 684 million to expand its market in the Inner Mongolia Autonomous Region.

According to the plans, the Shenzhen listed buyer intends to inject the assets into a subsidiary Jiaxinde Coal Co in which a 51% stake was acquired by Hebei Jinniu Energy Resources for CNY 861.9 million.

As of July 31 2011 Shengxin Coal had CNY 138.57 million in assets and CNY 10.85 million in liabilities and the firm debt/asset ratio was 7.83%. It is risky for Hebei Jinniu Energy Resources to acquire Shengxin Coal, because the firm is still in the process of technology upgrading and has yet received any coal exploration license, said analysts.

Sources reported that Hebei Jinniu Energy Resources aims to produce more than 200 million tonnes of coal by 2015 with annual sales exceeding CNY 300 billion and pre tax profit exceeding CNY 30 billion.

(Sourced from China Knowledge)