Tags: gold | price | shandong | slump

Shandong Gold Scraps $2.1 Billion Asset Purchase on Price Slump

Friday, 27 Dec 2013 09:32 AM

Shandong Gold Mining Co., China’s third-largest traded gold company by value, abandoned a plan to buy about 13 billion yuan ($2.1 billion) of assets from its parent and other parties because of a price drop.

“Due to big changes in external factors including the current international gold price and the domestic capital market, the parties have decided to terminate this major asset restructuring in order to protect interests of the company and its shareholders,” Shandong Gold’s independent directors said in a statement to the Shanghai stock exchange.

Gold has slumped 27 percent in the past year as some investors lost faith in bullion as a preserver of wealth. Shandong Gold shares have plunged 55 percent in Shanghai trading this year, compared with a 7.2 percent drop in the Shanghai Stock Exchange Composite index.

Shandong Gold’s planned acquisitions were meant to strengthen its gold reserves, expand production, and improve competitiveness, it said in June. It planned to finance the purchase with a 9.98 billion yuan share swap and a private share sale, it said then.

While the company bore some of the intermediary costs, it didn’t suffer other losses due to the termination of the deal, Shandong Gold said in a separate statement today.

The shares were halted from trading Thursday. The statement didn’t say when the stock will resume trading.

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Shandong Gold Mining Co., China's third-largest traded gold company by value, abandoned a plan to buy about 13 billion yuan ($2.1 billion) of assets from its parent and other parties because of a price drop.
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2013-32-27
Friday, 27 Dec 2013 09:32 AM
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