China GengSheng Minerals, Inc. (CHGS) Reports Minority Purchase

By @ibtimes on

China GengSheng Minerals, Inc. reported that it has purchased a minority position in an industrial company located in China.

China GengSheng Minerals, Inc. agreed to purchase a 24.5% owner ship stake in Yili Yiqiang Silicon Company for approximately $2.3 million. The company is a leading manufacturer of green silicon carbide, which is used as a raw material in the manufacturing of abrasive products sold by China GengSheng Minerals, Inc.

The Yili Yiqiang Silicon Company is located in Xinjiang Province, and reported reserves of six million tons of green silicon carbide. The company currently has the ability to produce 16,000 metric tons of green silicon carbide annually.

The Yili Yiqiang Silicon Company currently estimates that 2011 revenues will reach $24 million, based on volume of 16,000 metric tons at an average price of $1,500 per metric ton.

China GengSheng Minerals, Inc. said it would use a combination of cash and bank loans to finance the transaction. The company expects the deal to close in early April 2011.

China GengSheng Minerals, Inc. made the purchase to help secure a future supply of raw material. The agreement includes the right of first refusal by China GengSheng Minerals, Inc. on the production output of the Yili Yiqiang Silicon Company.

For more information on the company, go to www.gengsheng.com

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