Oct. 29, 2010 (China Knowledge) - CITIC Resources Holdings Ltd<1205
>, a Chinese energy and base metal producer, confirmed that it will spin off its unit CITIC Dameng Holdings for an initial public offering on the Hong Kong Stock Exchange by the end of this year, sources reported.
Upon the completion of the restructuring, CITIC Resources will hold a 39.3% stake in CITIC Dameng, remaining the largest shareholder of the company.
CITIC Dameng, the manganese mining and processing unit of CITIC Resources, is expected to raise between US$300 million and US$400 million from the IPO. Proceeds from the offering will be used to increase production capacity, acquire mineral reserves, pay back bank loans and supplement working capital.
CITIC Resources Holdings is expected to receive proceeds of HK$1.85 billion from the planned listing.
CITIC Dameng, which is engaged in the exploration, mining and processing of manganese, had net assets of HK$1.1 billion as of Jun. 30. The company's pre-tax profit for the first half of this year was HK$84 million, compared with HK$75.3 million for the full year in 2009 and HK$431.1 million in 2008, according to an earlier report from China Knowledge.