SUNGREEN beobachten +42%
skunk.works : SUNGREEN beobachten +42%
skunk.works : Sungreen update
Sungreen (8306.HK), a fertilizer distributor, jumps 46.2% to HK$7.60 on resuming trade, boosted by plan to buy metal mine in Inner Mongolia for HK$892.5 million, which it says has 31.1 tons of zinc resources, 10.83 tons of lead, 42.89 tons of sulfur.
Of HK$892.5 million consideration, only HK$30 million will be paid in cash, HK$106 million by issue of new shares, HK$757 million via issue of convertible bond. New shares, conversion price of CBs both set at HK$5.50.
Vendor guarantees that FY08 earnings will not be less than CNY200 million, so on paper deal priced very cheaply but significant dilution from new shares, also execution risks cannot be overlooked. Despite size of gains, volume only HK$11.8 million; intraday peak of HK$8.10 may not revisited.