| CATEGORY: AIM BULLETIN SECTOR: CONSTRUCTION & MATERIALS |
Prosperity sells cement business |
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Mon 21 Dec 2009
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LONDON (SHARECAST) - The share price of Prosperity Minerals Holdings shot up on Monday morning after the iron ore trader said the proposed sale of its Chinese cement business is to go ahead.
Prosperity expects its cash position will be boosted by HK$3,800m (around £300m) as a result of the sale of Upper Value Investments, which will also leave it debt free.
The company buying the cement interests, Target, is a wholly owned subsidiary of Pro-Rise Business and is listed on the Hong Kong Stock Exchange. Pro-Rise is wholly owned by Prosperity.
Prosperity was glad to exit the cement business, which it described as a 'capital intensive industry' requiring constant heavy investment in new production facilities.
'This capital requirement would limit the flexibility of the company to invest in its existing iron ore related business as well as other businesses which the board believes could yield a better return for the group in the longer term,' said Wong Ben Koon, chairman and chief executive officer of Prosperity.
Trading in the company's shares in London has been restored.
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