India Globalization (stock symbol: IGC) has completed a major acquisition:
IGC Completes Acquisition of Ironman Transaction Closed as of December 31, 2011; Projected to Swing IGC to Profitability
BETHESDA, MD--(Marketwire -02/02/12)- India Globalization Capital, Inc. (AMEX: IGC - News), a company competing in the rapidly growing materials and infrastructure industry in India, announced it has completed the acquisition of Ironman in China.
The combined companies will be able to leverage expertise in India and in China to improve operating margins and profitability. The combined company will also have a significantly stronger balance sheet to support operations. For the financial year ended (FYE) March 31, 2011, Ironman sold high-grade iron ore (65-66% Fe content) generating revenue of $13.5 million with an operating income of $8.0 million and a net income of $5.67 million. Ironman's balance sheet had, as of FYE March 31, 2011, Total Assets of about $15.2 million and total liabilities of about $8.2 million and stockholders' equity of about $6.9 million. We expect to combine the financial statements as of December 31, 2011.
PRC Ironman operates a beneficiation plant on a site with approximately 2.2 square kilometers of iron ore deposits. The initial studies project more than 3 million metric tons of ore deposits on this site. At current prices, the projected value of the reserves is approximately $350 million. The plant takes low-grade iron ore and through a dry and wet separation process extracts high-grade iron ore. Our strategy will be to ship low-grade iron ore from India to the plant and process the ore into high-grade ore, which can then be sold to customers in China. China is the world's largest iron ore importer. The market for Chinese steel includes Japan and other Asian countries such as India.
Mukunda, IGC's CEO, commented, "We are pleased to join with a great management team in China and build a superior company focused on materials and infrastructure in two of the fastest growing economies in the world. We believe that the current volatility on world markets creates an even greater opportunity to build this platform at a reasonable valuation. We encourage our investors to visit our Chinese subsidiary's web site at www.hfironman.net."
Mukunda added, "In the short term, our strategy is focused on three goals: First, this acquisition will be the catalyst that returns IGC to profitability in the next fiscal year beginning in March 2012. Second, the acquisition positions us to boost capacity organically and through further acquisitions of complementary iron ore mining and processing operations. Third, we see a good opportunity to leverage Ironman's beneficiation plant to facilitate the export of low-grade iron ore out of India into China where the ore can be beneficiated into higher-grade ore for sale to Chinese customers. We believe that the synergies will potentially add significant incremental revenue and profit for the coming fiscal year and drive IGC to profitability."
<snip>
finance.yahoo.com |
