ABTERRA 
By (Company Registration No. 199903007C)
PROPOSED ACQUISITION OF 54.42% OF THE EQUITY INTEREST IN ZUOQUAN XINRUI METALLURGY MINE CO., LTD - TERMINATION OF SALE AND PURCHASE AGREEMENT INTRODUCTION
The Board of Directors (the "Board") of Abterra Ltd. (the "Company") refers to the announcement by the Company on 7 April 2011, 5 April 2012, 5 October 2012 and 6 July 2013 ("Announcements") in relation to the Revised Proposed Acquisition. Unless otherwise stated, capitalised terms used in this announcement shall have the same meaning as ascribed to them in the Announcements.
The Board wishes to announce that Manfu, Kaitemei, the Company and Full Winner have on 31
December 2013, entered into a deed of termination (the "Deed") to terminate the Restated Agreement. The Board is of the view that the termination of the Revised Proposed Acquisition is in the best interests of the Company for the following reasons:-
(a) The Revised Proposed Acquisition is no longer feasible as, notwithstanding the long time period provided, Full Winner is unable to fulfil the Conditions Precedent. In particular, Full Winner has not delivered the Valuation Report to the Company.
(b) As disclosed in the Annual Report of the Company for the financial year ending 31 December
2011, in April 2008, the Safety Production Permit of Iron Ore Mine 1 of Xinrui expired. The expired Safety Production Permit had not yet been fully renewed up to the date of the Deed, and the Company is of the view that this is not in compliance with one of the Conditions Precedent and had added significant uncertainty to the operation of Xinrui.
The salient terms of the Deed are as follows:-
(a) Full Winner shall repay to the Company the sum of RMB491,362,174.59 ("Refund Payment"), being the aggregate of the amount of Initial Payment (RMB442,920,067.48) and the amount of interest accrued on the Initial Payment (RMB48,442,107.11). The Refund Payment shall be paid to the Company by Full Winner in the following manner:-
(i) the amount of RMB48,442,000 shall be paid on the date falling thirty (30) days after the date of the Deed;
(ii) the amount of RMB74,398,000 shall be paid on the date falling three (3) months after the date of the Deed;
(iii) the amount of RMB122,840,000 shall be paid on the date falling nine (9) months after the
date of the Deed;
(iv) the amount of RMB122,840,000 shall be paid on the date falling fifteen (15) months after the date of the Deed; and
(v) the amount of RMB122,842,174.59 shall be paid on the date falling twenty-one (21)
months after the date of the Deed.
(b) Manfu shall irrevocably and unconditionally guarantee the repayment of the Refund Payment by
Full Winner to the Company.
(c) As security for the fulfilment of Full Winner's obligations under the Deed, Full Winner shall procure that Distant Star Trading 544 (Pty) Ltd. ("Distant Star") grant a first ranking mortgage and/or security interest in the exploration rights of a manganese mine owned by Distant Star and located in Gauteng, South Africa (the "Mine") within thirty (30) days of the date of the Deed. Full Winner shall also procure that Distant Star grant a first ranking mortgage and/or security interest in the mining rights to the Mine, once such mining rights are granted, within thirty (30) days of the date of grant.
(d) In the event that the above-mentioned security is insufficient to secure the repayment of the aggregate outstanding amount payable by Full Winner to the Company under the Deed, Full Winner shall be required to provide such additional security upon written demand from the Company to cover such shortfall.
Manfu is a company established under the laws of the PRC and registered in Shenzhen. The Vendor is mainly engaged in the development of mines and the trading of coal, coke and iron ore. Full Winner is a company incorporated under the laws of the British Virgin Islands and is a wholly-owned subsidiary of Manfu.
Distant Star is a company established under the laws of South Africa and is effectively owned by Full
Winner (65%), Crosscon Resources Co., Ltd. ("Crosscon") (20%) and Wide Treasure Enterprises Inc
("Wide Treasure") (15%).
None of the Directors of the Company has any interest, direct or indirect, in the Deed. As far as the Directors are aware, no substantial shareholder of the Company, has an interest, direct or indirect, in the Deed and the Directors of the Company have not received any notification of any interest in the Restated Agreement from any substantial shareholder of the Company or any of their associates. As far as the Directors are aware, none of Manfu, Full Winner, Distant Star and the intermediate holding companies of Distant Star, Crosscon and Wide Treasure is related to any substantial shareholder of the Company.
BY ORDER OF THE BOARD Lau Yu
Chief Executive Officer
31 December 2013
|
distributed by
|
