China Nickel Resources Holdings (02889.HK) announced that in accordance with the policy of relocating iron steel enterprises out from the urban areas under the "Twelfth Five Year Plan" of the PRC and as part of Luoyang City's development planning policy, the Luoyang Government has arranged the relocation of Luoyang Yong'an Special Steel Co., Ltd. (Yong'an Special Steel), a 51%-owned subsidiary of China Nickel Resources, which includes (1) land resumption and relocation, pursuant to which Luoyang Government will pay various fees in an aggregate amount of RMB1 billion (HK$1.227 billion) to Zhengzhou Yongtong Special Steel Co., Ltd. (Yongtong Special Steel), a company wholly owned by China Nickel Resources; and (2) restructuring, pursuant to which Yongtong Special Steel will transfer its 51% interest in Yong'an Special Steel to a company as nominated by Luoyang Government, in order to tie in with the urban development of Luoyang City.

Pursuant to an agreement between Yongtong Special Steel and the Luoyang Government, the Luoyang Government will resume five parcels of industrial land located at Guanlin North Road, Luolong District, Luoyang City, Henan Province with an aggregate area of 737,636 sqm which are primarily used by Yong'an Special Steel for production, warehouse and ancillary offices purposes.

Upon completion of the land resumption and relocation, China Nickel Resources intends to relocate the manufacturing and production facilities according to the production plan of the company.

According to the arrangement by the Luoyang Government, China Nickel Resources had ceased the production activities of Yong'an Special Steel since 31 October 2011.

China Nickel Resources will use the proceed to repay the external debt of RMB150 million (HK$184.05 million) owned by Yong'an Special Steel. The remaining amounts will be used as general working capital of the group.

Source:chinesestock.org