Yue Da steps up mine shift

Yue Da Holdings, a toll-road operator evolving into a metals producer, will increase its investment in mining by acquiring an iron and zinc quarry, while disposing of a highway, market sources said.

The company, which has been suspended from trading since Tuesday, will buy from Feilong Holding (China) a mine in Yennan province with a reserve of 10 million to 12 million tonners of mostly iron ore for 250 million yuan, sources said.

It will also sell for 50 million yuan its remaining 12 years of operation rights in National Highway 204- the Xinfu section in Jiangsu province.

After the disposal, the only stretch of toll road it will control is the Wenan section in Hebei province of National Highway 106, for which it has a concession for another 17 years. Yue Da wants to sell the Wenan section, too, but it is afraid that the stock exchange will treat it as a new listing if it disposes of all its toll-road businesses, people close to the company said.

Privately-owned Jiangsu Yue Da Group's Hong Kong-listed arm, which saw its first-half net profit drop 8.24 percent to 9.41 million yuan on turnover of 54.9 million yuan, willk fund the acquisition though proceeds from the toll road sale and internal cash. It is also considering placing new shares, sources said.

in June, the company acquired four mines in Yunnan province containing lead and zinc also from Feilong Holdings for 300 million yuan.

Feilong will own up to 21.5 percent of Yue Da's enlarged capital upon exercising the convertible bonds, while parent Yue Da Group's interest in the listed company will be diluted to 54.6 percent from 70 percent.