Unionmet

Unionmet: Co has entered into a JV with China Tin, to subscribe for a 65% stake in PT Yinchenindo which owns 11 mining rights and other undisclosed assets. The other 35% will be subscribed by an individual Mr Wu…

Out of the total consideration of US$10m, co will contribute US$4.4m (S$400k for JV share capital) for a effective 26% stake. PT Yinchenindo will undertake to pay Mr Wu US$1.5m in dividends and the JV will assign any div entitled to Mr Wu until the US$1.5m is satisfied...

In return he will undertake that he will not have any interest in any mining businesses or services as long as he is a shareholder and that PT Yinchendo's liabilities will not exceed US$4m as of completion date of this acquisition...

PT Yinchendo is loss-making and has net tangible assets of US$37.0m. Co is of the view that this will enable the co to capitalise on opportunities in Indonesia's mining industry and draw on China Tin's experience in tin mining and smelting...

Co is effectively paying US$4.0m for NTA of US$9.6m. However, there was no mention of the consideration paid by Mr Wu for the 35% stake and the deal is apparently structured so he will run the operations of PT Yinchenindo which may indicate some level of key man risk...

Unionmet is involved in the business of manufacture of indium and zinc as raw materials and has net assets of US$37.0m. Co managed to turn a slight profit of US$312k up from a loss of $3.7m in 09