Prosperity Minerals receives final payment from disposal of cement business


Updated Tue, 24 Aug 2010 00:00:00 GMT

Prosperity Minerals (LON:PMHL) has received the final £16.5m (HK$200m) payment from the disposal of it cement businesses to TCC International Limited. Earlier this year, the company sold most of its cement related assets to TCC in a deal worth approximately £313.5m (HK$3.8bn).

Today, the company also received an increase in the Shareholder Loan Balance of US$49.6m (£31.7m) from the disposal.

Since the disposal, Prosperity Minerals has focussed on the development of its Chinese iron ore business, and it has also entered the Chinese real estate sector.

The greater emphasis on iron ore, was reflected in the company's latest result which showed an 80% year-on-year increase in the total tonnage shipped to 7.9m tonnes (FY09: 4.4m tonnes).

Prosperity Minerals recently agreed a significant new iron ore master off-take agreement with Grace Wise Pte Ltd, to purchase ore from Malaysia. The three-year off-take deal sees maximum trading volumes capped at 1.5m metric tonnes in FY11, 2.5m metric tonnes in FY12 and 4m metric tonnes in FY13.

With its first steps into the Chinese real estate development sector, Prosperity entered into agreements for two separate property investments - in the Fujian Province in south-east China and in Guangzhou City - in June.

According to Prosperity, the PRC's long term urbanization plan brings increased demand for high-quality housing in China's cities. Furthermore, the PRC real estate market has recently entered a down-cycle, offering an opportune time to enter the PRC real estate market.

Additionally, the company has also returned value to shareholder via on-market share buy-backs.