Gulf Resources Inc. operates through two wholly-owned subsidiaries, Shouguang City Haoyuan Chemical Company and Shouguang Yuxin Chemical Industry. The company believes that it is one of the largest producers of bromine and crude salt in China.
Bromine is used to manufacture a wide variety of compounds utilized in industry and agriculture. Through its Shouguang Yuxin Chemical subsidiary, Gulf Resources manufactures specialty chemical products utilized in a variety of applications, including oil & gas field explorations and papermaking.
Gulf Resources today announced that on December 22, 2009 it closed a private placement financing which was previously announced on December 11, 2009. In the transaction, the company issued 2,941,182 shares of its common stock at a price of $8.50 per share for an approximate aggregate purchase price of $25 million.
The company plans to use the proceeds of the private placement with institutional shareholders to acquire additional bromine and crude salt production assets in China, as well as for general corporate purposes such as working capital.
The CEO of Gulf Resources, Mr. Xiaobin Liu, spoke about the importance of the closing of the private placement. He said, “The proceeds will strengthen our balance sheet and help us expand our footprint through increased production capacity as we strive to cement our position as the largest bromine and crude salt producer in China.”