Sharyn Gol JSC Announces Closure of Tender Offer for and Acquisition of Naco Fuel JSC, Expanding the Company's Operations into Value-Added, Clean Coal Products
ULAANBAATAR, Mongolia, Sept. 30, 2013 /CNW/ - Sharyn Gol JSC (MSE: SHG; "Sharyn Gol") is pleased to announce it has closed the previously announced tender offer for Naco Fuels JSC (MSE: NKT; "Naco"), with the acquisition of 11,723,989 shares, representing 92.9% of Naco. Naco owns a coal enrichment and briquetting plant located in Darkhan, Mongolia. Sharyn Gol intends to return Naco's plant, which is ideally situated to enrich Sharyn Gol's coal into clean burning char and smokeless briquettes, to operation in October 2013.
There is strong demand for smokeless fuel in Mongolia amounting currently to an estimated 500,000t of smokeless fuel in UB city alone, with additional markets in the industrial cities of Darkhan and Erdenet, plus other industrial users. The replacement of raw coal with smokeless fuel as the primary heat source in the informal housing (ger) districts would significantly reduce air pollution in Ulaanbaatar and elsewhere. According to a report by the World Bank, "compared to other cities for which data is available in global databases, and also compared to Chinese cities with high PM (particulate matter) concentrations, UB appears to be the most PM-polluted capital and is among the cities with the worst air quality in the world".
Graham Chapman, Sharyn Gol's CEO, stated: "The Naco acquisition represents a logical expansion of Sharyn Gol into the highly attractive market for coal briquettes. Sharyn Gol intends to aggressively expand its smokeless fuel business and will continue to make opportunistic investments to maximize revenue and cash flow growth for the benefit of all its shareholders."
Sharyn Gol, located 2,225 kilometers north of Ulaanbaatar, on Mongolia's main national rail line, is a leading producer of high-grade thermal coal and sells to state-owned power stations, local cement factories as well as retail consumers.
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