China Special Steel to acquire S. Kalimantan mine: Report

China Special Steel Holdings Co., which produces bearings and springs used in autos, said it will spend HK$2.73 billion ($349 million) to buy rights to an Indonesian mine with iron and nickel deposits.

The company said it will pay HK$95.5 million in cash and HK$2.32 billion in shares to acquire a British Virgin Islands' company with a 14-year, exclusive-rights agreement to purchase iron and nickel from PT Yiwan Mining in South Kalimantan. The company said the acquisition will help it meet rising demand for stainless steel.

China Special Steel will also issue HK$316 million in convertible notes to help fund the acquisition, the Zhengzhou, Henan province-based company said in a statement published in the Standard, a Hong Kong newspaper.

The Indonesian mining rights will be purchased through Infonics International Ltd., a subsidiary of China Special Steel, the company said. The rights are held by a British Virgin Islands company 78 percent owned by Dong Shutong, chairman and chief executive of China Special Steel.

The company also announced that it will issue 56.1 million new shares and convertible bonds to Deutsche Bank AG to raise about HK$700 million. The funds will be used for business expansion in production of special steel and working capital requirements for a new processing facility in China. (*)