Shenghe Resources to transfer 51% stakes in four Companies including Leshan Shenghe

Shenghe Resources announced on October 18 that it plans to enter into an equity cooperation with China Rare Earth Industrial Development to transfer a 51% stake in the divested Leshan Shenghe, as well as 51% stakes in Quannan New Resources, Jiangyin Jiahua and Zibo Jiahua--all held by its controlled subsidiary Chenguang Rare Earth--to China Rare Earth Development. The final transfer price is expected to range from RMB1.6575 billion (USD248.01 million) to RMB1.8105 billion (USD270.90 million).

As of the announcement date, the company has provided RMB800 million (USD119.70 million) in guarantees for Leshan Shenghe. Upon signing and implementation of the equity transfer cooperation agreement, Leshan Shenghe (new), Quannan New Resources, Jiangyin Jiahua and Zibo Jiahua will no longer be consolidated into the company's financial statements. The company will account for the target companies using the equity method based on its post-transaction shareholding ratio and recognize investment income accordingly.