On 2 June 2010, Computech signed an Acquisition Agreement purchasing 86% of the issued share capital of the Target, and the Sale Loan at a Consideration of HK$2,395,601,000. The Consideration is satisfied by a combination of cash, consideration Convertible Preference Share and Promissory Notes.
The Target and its subsidiaries are mainly involved in the mining of molybdenum mineral ("Moly") in Kuandian Manchu Automonous County, Zhenjiang Town, Wanbao Village which is in the north east of Liaoning Province in China. The Molybdenum Mine has a total of approximately 71.4Mt of mineral resources at an average molybdenum grade of approximately 0.12%. Moly is a mineral commonly used as an alloy agent for steel products.
Considering that the IT business may not provide good prospect to the Group, Computech therefore proposes to participate in the mining business by way of the Acquisition which represents a valuable business opportunity to the Group.
Completion of the Acquisition is subject to satisfaction / waiver of conditions precedents. Details of the Acquisition, please refer to our Announcement dated 28 July 2010.