General Steel Holdings, Inc. (NYSE: GSI), announced today that the Company, along with its 1% minority interest holder, have jointly signed an equity transfer agreement (the “Agreement”) to sell 100% of the equity interest in Maoming Hengda Steel Co., Ltd., (“Maoming Hengda”) to Tianwu Tongyong (Tianjin) International Trade Co., Ltd, (“Tianwu Tongyong”) for RMB331.3 million or approximately $51 million.
The Company expects to receive total proceeds of RMB328.0 million (approximately $50 million), of which RMB262.3 million (approximately $40 million) will be paid within five days after the signing of the Agreement, and the remainder RMB65.7 million (approximately $10 million) will be paid within one year. The Company estimates that it will be able to realize a net equity gain of RMB452.7 million (approximately $70 million), which should substantially enhance its net book value.
Henry Yu, Chairman and interim Chief Executive Officer of General Steel commented, “Today’s announcement is another critical step in the Company’s business transformation, which also included the recently-completed sale of the Company’s steel manufacturing business. This transaction allowed us to unlock the value in Maoming Hengda’s land assets, which we believe should greatly enhance our capital structure and solvency, enabling us to strengthen our existing business while exploring additional business opportunities.”