Tuesday, December 10, 2013

Henan Billions to raise capital for its titanium slag projec

The project investing into the upstream of TiO2 was first put forward in Feb. 2013 (please refer to Titanium Dioxide China Monthly Report 1303 for more details) and has been adopted by the board of trustees. On 7 Nov., Henan Billions released an advanced plan for raising capital of USD91.47 million (including issuance cost) to fund the construction and the operating liquidity of its titanium slag project.

The titanium slag project includes two phases. The first phase requires an investment of USD107.77 million, including USD81.55 million for the construction and USD26.21 million for the operating liquidity. The first phase is estimated to be completed after one and a half years and is estimated to provide 150,000 tonnes of titanium slag every year, which is sufficient for Henan Billions's 60,000t/a chloride process TiO2 project.

Henan Billions has embarked on this project to reduce the effects of fluctuations in the titanium feedstock price and to reduce its costs for raw materials. Possessing titanium resources means initiative in industry chain, which is especially vital for developing chloride process TiO2. Possessing titanium resources can reduce the raw materials cost and cyclical fluctuations in profits, as the byproducts of titanium slag produced in the machining process can offset the cyclical fluctuations of the TiO2 industry. In order to reduce its reliance on titanium feedstock imports and to cut costs, Henan Billions has reduced its import volume of titanium feedstock in 2013 and has enhanced its purchases of domestic titanium feedstock, especially those produced in Panzhihua City, Sichuan Province.

Although small investors of Henan Billions oppose the capital raising plan and despite Henan Billions' stock declining by 5.47% to USD3.29 (RMB20.22) per share on 7 Nov., the day when the plan was released, as the issue price is USD3.05 (RMB18.72) per share, the issue plan is not likely to fail. This is because the issue plan is targeted at large investors and the current controllers of Henan Billions. Therefore, although the stock price is under the issue price, the targets of the issue plan will still subscribe to the new shares.

Table of Contents of TiO2 China Monthly Report 1311
The China Titanium Week 2013: sluggish market status would last to the end of 2013
Domestic TiO2 price kept stable from mid-Oct. to mid-Nov. 
China's "Double 11" online shopping festival fails to live up to expectations for the coating industry
Wind power industry to bring recovering demand for heavy duty coating
Henan Billions to raise capital for its titanium slag project
CPI Yuanda acquires upstream SCR TiO2 supplier
Import volume increased by 22.42% while export volume declined by 6.46% in Sept.
Domestic TiO2 price may edge down after the traditional selling season
Domestic titanium feedstock supply increased in Sept. as domestic capacity expanded 
Domestic TiO2 market is improving as profitability improved and inventories fell in Q3

Titanium Dioxide China Monthly Report, issued by CCM on 25th, is mainly comprised of five columns of news and reports related to TiO2 market, including “Supply & Demand”, “Company Dynamics”, “Upstream”, “Downstream” and “Price Update”. You can find out more business opportunities through the latest and helpful information provided in the report.

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