Sinoma unit to buy stake in Hazemag

A subsidiary of Hong Kong-listed China National Materials (Sinoma) is acquiring a majority stake in a German mining equipment firm for HK$1.06 billion.

The state-owned firm said in a statement filed to the Hong Kong stock exchange yesterday that Sinoma International Engineering, the world's biggest cement equipment producer, which is listed in Shanghai, would acquire 59.09 per cent of Hazemag & EPR from Schmidt through a share purchase agreement.

Hazemag makes, trades and services components and facilities used in minerals processing and preparation, process technologies, and machines used in drilling, loading and transport in underground coal mines.

"[It] will improve the technique, strengthen the management and establish the channels for the purpose of rapid expansion of Sinoma International to the field of mining equipment and generate more return for the group when Hazemag makes more profit in the future," Sinoma chairman Liu Zhijiang said in the statement.

Hazemag's post-tax profit for last year was €7.67 million (HK$77.8 million). By June this year, the unaudited net assets of Hazemag and its subsidiaries were valued at about €39.57 million.

Under the share purchase agreement, Sinoma International will buy two million Hazemag shares for €51.99 million no later than March next year and another two million shares for €52 million from the end of November next year to the end of February 2015.

It said the transaction price was agreed by the parties after arm's length negotiation by reference to the total value of Hazemag - €156 million at €26 per share.

Sinoma had earlier requested that trading of its shares be suspended from 9am yesterday, pending the release of the announcement. It has applied to the stock exchange for resumption of trading today. The stock closed at HK$1.61 on Friday.