Nanling Explosive To Absorb Shinehood Explosives

Date:2011-10-20houhaizhen  Text Size:

October 20 -- Hunan Nanling Industry Explosive Material (RCode: 002096:), a maker of demolition equipment and explosives, plans to offer 40.97-53.46 million shares at 31.46 yuan per share to shareholders of Hunan Shinehood Explosives Group in order to absorb the latter, reports Shanghai Securities News, citing a company filing.

After the absorption, Nanling Explosive will survive while Shinehood Explosives will be written off.

The net assets of Shinehood Explosives are valued at 1.65 billion yuan, which may be reduced to 1.29 billion yuan once the dissenting shareholders of Shinehood Explosives exercise the cash options.

The exercise price of the dissenting shareholders' cash options are 31.46 yuan a share.

Nanling Explosive and Shinehood Explosives are both Hunan-based privately-run explosive makers. Nanling Explosive makes mainly industrial explosives, while Shinehood Explosives supplies most of the industrial detonators and cables.

The merger will cement Nanling Explosive's position as the market leader in the domestic civilian explosives market, and increase its annual production volume of industrial explosives to 159,000 tons.

After the absorption, Nanling’s total assets and net assets will increase 213 percent and 214 percent to 2.27 billion yuan and 1.64 billion yuan, respectively.

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