It is reported that Heilongjiang Heihua will merge with Xiamen Xianglu Petrochemicals Limited through the acquisition of shares held by controlling shareholder Xiamen Xianglu Chemical Fiber Company Limited.

Heihua will exchange its total asset and liabilities for shares of an equivalent value in Xianglu Petrochemicals and Xianglu Chemical Fiber Company will receive 127 million shares of Heihua. Heihua will need to issue approximately 1.41 billion new shares at CNY 4.74 per share to acquire Xianglu Petrochemicals based on the estimated values of Heihua and Xianglu Petrochemical which are CNY 550 million and CNY 7.24 billion.

Xianglu Petrochemicals will cease to exist subsequent to the transaction.

As per report, after the transaction Heihua will shift its focus from the coking and coal chemical industry to primarily engage in the production and sales of pure terephthalic acid as Xianglu Petrochemicals is a major manufacturer of this product.

(Sourced from stcn.com)