Dacheng Pesticide tries Mining after poor 2010 earnings

Shandong Dacheng Pesticide intends to spend 1.9 billion yuan to acquire a 100-percent stake in Hualian Mining, reports Shanghai Securities News, citing a company filing. The move comes as part of Dacheng Pesticide’s plan to exit the pesticide industry and become a mining company through the asset acquisition.

In the meantime, Dachang Pesticide will sell all of its existing assets for 380 million yuan, with the remaining 15.2 billion yuan for acquisition will be raised by issuing 178 million shares to nine designated shareholders at 8.52 yuan per share.

Hualian Mining currently has iron ore reserve volume of 82 million tons, with exploitable volume of 50 million tons.

Dacheng Pesticide reported a net loss of 71.12 million yuan in 2010, with sales revenue of 788 million yuan, up 4.63 percent from 2009.