HUIZHOU, China, Jan. 5, 2011 /PRNewswire-Asia-FirstCall/ --
This press release is issued for information purposes only and
does not constitute an offer to sell or the solicitation of an
offer to subscribe for or buy any security, nor is it a
solicitation of any vote or approval in any jurisdiction, nor shall
there be any sale, issuance or transfer of the securities referred
to in this press release in any jurisdiction in contravention of
applicable law.
Neither the U. S. Securities and Exchange Commission nor any
state securities commission has approved or disapproved of the
Proposed Offer (defined below) or securities to be issued in
connection therewith, or passed upon the adequacy or accuracy of
this press release, or the merits or fairness of the Proposed
Offer. Any representation to the contrary is a criminal
offense.
Qiao Xing Universal Resources, Inc. (Nasdaq: XING, the "Company"
or "XING"), one of the leading players in
the molybdenum-mining business
as well as a company with meaningful size in the
resources industry, today announced that its subsidiary (the
"Subsidiary") has placed the winning bid and completed the
acquisition of a 34.53% equity interest in Chifeng Aolunhua Mining
Co., Ltd. ("Aolunhua") for RMB 185
million (US$28 million) from a
local Chinese government agency. The consideration for the bid will
be paid in two cash installments within six months. With the cash
in hand, cash flow to be generated from our three in-operation
mining projects as well as some bank loans (when necessary), we
believe that we will be able to pay the purchase price as
scheduled. Given our financial condition and reputation in
China, we believe that bank loans
will be available to us if we need them..
Aolunhua owns an open-pit copper-molybdenum mine (the "Mine" or
"Aolunhua Mine") covering 14.38 square kilometers. The Mine
is located in Ar Horqin Banner, in Chifeng City in the Inner
Mongolia Autonomous Region, and has economical access to
transportation, water, and electricity. According to a domestic
technical report, the Mine has reserves of 372.9 million tons of
ore that contains 159,293 tons of molybdenum metal at a grade of
approximately 0.0663%, as well other byproducts such as 26,000 tons
of copper and 100 tons of silver metal. The Mine's designed annual
processing capacity is 4.29 million tons of ore, which can yield
5,000 tons of molybdenum concentrate and 5,000 tons of copper
concentrate on average grades basis. Commercial operation began in
September 2009 and reached a daily
processing capacity of 15,000 tons of ore by the end of 2009. In
2010, the Mine processed a total of 4.49 million tons of ore, which
yielded 4,496 tons of 53.43% molybdenum concentrates (which
contained 1,968 tons of molybdenum metal), and 2,861 tons of copper
concentrates (which contained 515 tons of copper metal and 2.8 tons
of silver metal).
Aolunhua, one of the top mining companies supported by the local
government in Chifeng City with a total investment of RMB 1.2 billion (U.S. $179
million), was established in February
2007. In addition to the total investment of RMB1.2 billion, the local government has
constructed an 80-kilometer paved road and a 70-kilometer power
line to the Mine at no expense to Aolunhua. Currently, the Aolunhua
Mine is the largest molybdenum mine in terms of operating capacity
in Asia. Aolunhua was
majority-owned by two Chinese state-owned enterprises ("SOEs"),
which owned 34.53% and 34.46%, respectively, and one private
investor (who owned 25.97%). In order to increase efficiency, one
State-owned enterprise controlled by the local government agreed to
transfer its 34.53% equity interest to a publicly listed company.
The transfer of this equity interest was subject to standard
procedures required by the PRC for the transfer of SOE properties
(including a public bidding process). With the help of Qiao Xing
Group Limited, the Company won the bid and purchased the 34.53%
equity interest at a considerably attractive price. The Company
intends to acquire a controlling stake in Aolunhua in the near
future.
Mr. Ruilin Wu, the Company's
Chairman and Chief Executive Officer, said, "As the Chinese
government is preparing to classify molybdenum as a national mining
resource, which could limit its mining starting this year, we are
increasingly optimistic about the business case for supplying
molybdenum products and the long-term price trend. We believe that
this additional copper-molybdenum mine, with molybdenum reserves
and milled molybdenum ore production capacity of four and ten
times, respectively, that of our existing Haozhou molybdenum mine,
will be an excellent fit with our strategy of increasing our
business scale and strengthening our resources portfolio. We are
now a major investor in Aolunhua. We further intend to acquire a
controlling equity interest in Aolunhua at an appropriate price and
time in the future. XING is now poised to be one of the leading
players in the molybdenum mining business in China.
"Following two important acquisitions, we think we have reached
our initial goal of becoming a company with meaningful size in the
resources industry. However, we will not cease our efforts to
explore additional acquisition opportunities in the future to
enhance our foothold in China's
resources industry."
About Qiao Xing Universal Resources, Inc.
Qiao Xing Universal Resources, Inc is one of the leading players
in the molybdenum mining business, as well as a company with
meaningful size in the resources industry. The Company focuses on
rare metals and several strategically important base metals,
including molybdenum, copper, lead and zinc.
The Company currently owns a 100% equity interest in Balinzuo
Banner Xinyuan Mining Co., Ltd. ("Xinyuan") and a 34.53% equity
interest in Chifeng Aolunhua Mining Co., Ltd ("Aolunhua"), as well
as the right to receive 100% of the expected residual returns from
Chifeng Haozhou Mining Co., Ltd. ("Haozhou Mining").
Xinyuan owns a mining license for a lead-zinc-copper mine that
covers 3.3233 square kilometres in Wulandaba Suma, Balinzuo Banner,
in the Inner Mongolia Autonomous Region, China (the "Xinyuan Mine"). The Xinyuan Mine,
which started operation in March
2010, expects to increase its processing capacity to as much
as 2,000 tons of ore per day by mid-2011 and expects to generate
revenue of RMB 430 million, operating
profit (EBITDA) of RMB 180 million
and net cash flow of over RMB 100
million in 2012.
Aolunhua is one of the leading molybdenum mining companies in
China. It owns an open-pit
copper-molybdenum mine (the "Aolunhua Mine") covering 14.38 square
kilometers in Ar Horqin Banner, in Chifeng city in the Inner
Mongolia Autonomous Region. The Aolunhua Mine has reserves of
372.9 million tons of ore and 159,293 tons of molybdenum metal at a
grade of approximately 0.0663%, as well as such byproducts as
26,000 tons of copper and 100 tons of silver metal. Its commercial
operations began in September 2009
and reached a daily processing capacity of 15,000 tons of ore by
the end of 2009. In 2010, the Mine processed a total of 4.49
million tons of ore and produced 4,496 tons of 53.43% molybdenum
concentrates (which contained 1,968 tons of molybdenum metal), and
2,861 tons of copper concentrates (which contained 515 tons of
copper metal and 2.8 tons of silver metal).
Haozhou Mining is a large copper-molybdenum poly-metallic mining
company in Inner Mongolia, China.
XING's Haozhou Molybdenum Mine business started operation in
July 2009 and generated net income of
RMB64.2 million (US$9.4 million) in the second half of 2009.
XING, one of the first Chinese private companies to be listed on
NASDAQ in 1999 and was previously one of the leading players in the
telecommunication terminal products business in China. In 2007, the Company made the strategic
decision to diversify into the resources industry. In April 2009, the Company acquired a 100% equity
interest in China Luxuriance Jade
Company, Ltd. ("CLJC") which owns the right to receive 100% of the
expected residual returns from Chifeng Haozhou Mining Co., Ltd. In
November 2009, XING divested its
fixed-line and low-end mobile phone businesses and changed its
corporate name to Qiao Xing Universal Resources, Inc., effective
January 28, 2010. The Company
reported a net profit of RMB 64.2
million (US$9.4 million) from
its molybdenum-mining business for the second half of fiscal year
2009. Based on the initial success of the Company's molybdenum
business as well as an extensive study of China's macro economic trends, XING is further
consolidating its strategy to become a pure resources company with
meaningful scale. .On September 8,
2010, XING announced the proposed offer to acquire all the
outstanding shares of its 61%-owned subsidiary Qiao Xing Mobile
Communication Co., Ltd. (NYSE: QXM, or "QXMC") that it does not
currently own, by way of a Scheme of Arrangement (the "Proposed
Offer") under British Virgin
Islands law, with the intention to spin off QXMC's mobile
phone assets or business and redeploy its assets into the resources
industry. This proposed acquisition is ongoing and its completion
is subject to several conditions, including approval from a
majority of the minority shareholders of QXMC. On December 21, 2010 and December 31, 2010, XING acquired the 100% equity
interest in Balinzuo Banner Xinyuan Mining Co., Ltd. ("Xinyuan")
and 34.53% equity interest in Chifeng Aolunhua Mining Co., Ltd
(Aolunhua) respectively.
The Company is actively evaluating additional acquisition
opportunities in the resources area to enhance its foothold in the
industry. Meanwhile it is making efforts to divest its existing
mobile phone business through the privatization of its QXMC
subsidiary or via other alternatives to become a pure-play
resources company.
Safe Harbor Statement
This press release contains forward-looking statements that
involve risks and uncertainties. These include statements about our
expectations, plans, objectives, assumptions or future events. In
some cases, you can identify forward-looking statements by
terminology such as "anticipate," "estimate," "plans," "potential,"
"projects," "continuing," "ongoing," "expects," "management
believes," "we believe," "we intend" and similar expressions. These
statements involve estimates, assumptions and uncertainties that
could cause actual results to differ materially from those
expressed. You should not place undue reliance on these
forward-looking statements.
Forward-looking statements include all statements other than
statements of historical facts, such as statements regarding our
ability to meet the payment schedules for our acquisitions, our
ability to obtain bank loans if needed, anticipated acquisitions,
estimates of revenue and profit, the privatization of QXMC, time
and date for the expected Court Hearing with respect to the
proposed privatization of QXMC, anticipated mining capacity and
production volumes, long-term growth prospects for the resources
industry, the Company and value for the Company's shareholders,
mine development and capital expenditures, mine production and
development plans, estimates of proven and probable reserves and
other mineralized material and the Company's transition to a pure
resources company and bigger player within the resources industry.
Readers are cautioned that forward-looking statements are not
guarantees of future performance and actual results may differ
materially from those projected, anticipated or assumed in the
forward-looking statements.
Forward-looking statements involve inherent risks and
uncertainties. A number of factors could cause actual results to
differ materially from those contained in any forward-looking
statement. Information regarding these factors is included in our
filings with the Securities and Exchange Commission. Qiao Xing
Universal Resources, Inc. does not undertake any obligation to
update any forward-looking statement, except as required under
applicable law. All information provided in this press release is
as of January 5, 2010.
Additional Information and Where to Find It
Qiao Xing Universal Resources, Inc. has filed a Schedule 13E-3
with the SEC in connection with the Proposed Offer. The Schedule
13E-3 contains additional information regarding the Proposed Offer,
including, without limitation, information regarding the special
meeting of shareholders of Qiao Xing Mobile Communication Co., Ltd
that will be called to consider the Proposed Offer. The Schedule
13E-3 contains important information about Qiao Xing Universal
Resources, Inc., Qiao Xing Mobile Communication Co., Ltd, the
Proposed Offer and related matters. Investors and shareholders
should read the Schedule 13E-3 and the other documents filed with
the SEC in connection with the Proposed Offer carefully before they
make any decision with respect to the Proposed Offer. A copy of the
Scheme of Arrangement with respect to the Proposed Offer is an
exhibit to the Schedule 13E-3. The Proposed Offer is expected to be
exempt from the registration requirements of the United States
Securities Act of 1933 Act by virtue of the exemption provided by
Section 3(a)(10); however, it is possible that the offer may change
forms such that the exemption provided by Section 3(a)(10) may no
longer be available. In such a case Qiao Xing Universal Resources,
Inc. may file a Form F-4 with respect to the Proposed Offer.
The Schedule 13E-3 and all other documents filed with the SEC in
connection with the Proposed Offer is available free of charge at
the SEC's web site at www.sec.gov. Additionally, the Schedule 13E-3
and all other documents filed with the SEC in connection with the
Proposed Offer will be made available to investors or shareholders
free of charge by calling or writing to:
Qiao Xing Universal
Resources
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Rick Xiao
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Vice President
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Phone:
+86-752-282-0268
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Email:
rick@qiaoxing.com
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USA IR AGENCY
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CCG Investor Relations
Inc.
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Mr. Ed Job, CFA
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Phone: +86-1381-699-7314
(Shanghai)
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Email:
ed.job@ccgir.com
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Filing under Rule
425
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under the
Securities Act of 1933
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Filing by: Qiao
Xing Universal Resources, Inc.
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Subject Company: Qiao Xing Mobile Communication Co., Ltd
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SEC File No. of Qiao Xing
Mobile Communication Co., Ltd: 001-33430
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SOURCE Qiao Xing Universal Resources, Inc.