Blackgold International Holdings Limited (BGG) is pleased to announce that it has entered into a share sale agreement to acquire 100% of the issued capital of Chongqing Gouping Shipping Transportation Company Limited from Chongqing Guoping Industrial Group Ltd. GPST operates a barge transport business along the Yangtze River, predominately coal, iron ore and sand. Its fleet consists of 9 hollow hull barges which carry bulk commodities or containers, with a total transport capacity of 43,000 tons.
Mr James Tong, Blackgold’s Executive Chairman said the acquisition of GPST is complementary to Blackgold’s current operations and as a result of the acquisition of GPST, Blackgold will have capabilities and dedicated internal resources covering each link of the value chain in its coal business – from production, transportation, storage to sales and marketing. This integrated business model will allow Blackgold to reduce its cost of sales and enhance its profit margin, and also meet its customers’ demand in a timely and cost-efficient manner by providing a whole supply chain solution.
Pursuant to the Share Sale Agreement, the Company will acquire all of the shares of GPST for consideration of RMB 155 million in cash less an amount to be offset after providing for the profit and the receivable and payable in the balance sheet dated 30 September 2011. The purchase price which will be paid as follows RMB 50 million at completion (expected to be in April 2012); and RMB 105 million by the later of 31 December 2012 and the determination of the offsets. The Share Sale Agreement is conditional upon approval by the Company’s Shareholders. As the Vendor is a related party of the Company, BDO has prepared an independent expert’s report for consideration by shareholders. BDO consider the acquisition fair and reasonable.
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