Yanzhou Coal Mining Co. Ltd. subsidiary Yanzhou Coal Ordos Neng Hua Co. Ltd. agreed to acquire Inner Mongolia Yitai Coal Co. Ltd.'s 25% equity stake in Inner Mongolia Yitai Zhundong Railway Co. Ltd. for 1.94 billion Chinese yuan.
The consideration will be paid in two installments, and closing is expected to occur with the payment of the first installment.
The transaction remains subject to the parties obtaining the necessary approvals, including other Yitai Zhundong shareholders giving up their pre-emptive rights to purchase for the stake.
Yanzhou Coal said Dec. 1 that the agreement will further strengthen its cooperation with Yitai Coal and increase coal production and sales with the newly built mines in Shaanxi-Mongolia region being put into operation in the future.
"In the next few years, the volume of transportation, operating efficiency and return on assets of Yitai Zhundong will be in a steady upward trend, the equity investment in Yitai Zhundong can achieve relatively good investment returns," the company said in a release.
The principal businesses of Yitai Zhundong include Zhundong railway construction, railway passenger and freight transportation, raw coal washing and sales, railway operation and management services, among others.
As of Dec. 1, US$1 was equivalent to 6.62 Chinese yuan.
