Mar. 17, 2010 (China Knowledge) - Dynamic Energy Holdings Ltd<0578>, which is engaged in the production and sale of coal in Henan Province, yesterday announced that it plans to acquire 22 local collieries that have coal reserves of 50 million tons and an annual output of 3.3 million tons in total.

On Mar. 12, the Hong Kong-listed firm signed a framework agreement with the Shilong District government in Pingdingshan, Henan Province and Henan Provincial Coal Seam Gas Development and Utilization Co Ltd for the acquisition.

In addition, Dynamic Energy Holdings will issue HK$1.2 billion worth of three-year convertible bonds with a conversion price of HK$0.1 apiece. If all the bonds are converted into shares, there will be around 12 billion new shares, and new shares will account for 85% of the increased capital.

RMB 140 million of the proceeds from the issuance will be used for bond redemption and the remaining RMB 1.06 billion will be used to replenish working capital.