Dongfang Zirconium (002167.SZ) plans to transfer 79.28% of Mingrui Zirconium's shares to relieve operating pressure and optimize asset structure

According to Zhitong Financial App, Oriental Zircon (002167.SZ) announced that Murray Zircon Pty Ltd (“Mingrui Zirconium”) is the company's controlling subsidiary Orient Zirconic Resources (Australia) Pty Ltd (“Australia”), a wholly-owned subsidiary of the company, holds 79.28% of the shares in Mingrui Zirconium.

Australia's Eastern Zirconia plans to transfer 79.28% of its shares in Mingrui Zirconium to Burley Link (Hong Kong) Limited (“Burley Link Hong Kong”). The consideration for the share transaction is RMB 1004.31 million. According to estimates, the transaction is expected to generate investment income of about RMB 28-320 million (the specific data is based on the audit results). After the transaction is completed, Australia's Eastern Zirconia will no longer hold shares in Mingrui Zirconium. The transferee, Burley Link Hong Kong, is a wholly-owned subsidiary of Longbai Group, the controlling shareholder of the company.

According to reports, the main asset of the Mingrui Zirconium industry is the Mingdali mining area. Since the mining area requires continuous operating capital investment and a long payback period, the Mingrui Zirconium industry will face greater capital and profit pressure in the next few years, and the company's business layout in emerging downstream application areas will also be greatly affected. In line with the company's strategic planning needs, the company plans to transfer 79.28% of Mingrui Zirconium's shares to relieve the operating pressure of the mining area, optimize the asset structure, and concentrate resources to further implement the company's strategic layout and development in emerging downstream application fields, consolidate the quality of the company's operations, accelerate the transformation and upgrading of new quality productivity, enhance core competitiveness, achieve profit-oriented and qualitative growth, and create greater economic benefits for all shareholders.

In addition, when selling 79.28% of Mingrui Zirconium's shares this time, the equity transfer agreement signed with Bailey United Hong Kong and Mingrui Zirconium will clearly stipulate that Australia Eastern Zirconium shall enjoy priority purchasing rights for zirconium resources produced by Mingrui Zirconium under the same conditions. Therefore, after the completion of this transaction, on the one hand, the company was able to optimize the asset structure and achieve effective return of capital, and then invest the capital in high-tech, high-value-added business in downstream emerging applications to help the company develop rapidly; on the other hand, the company has priority purchasing rights for the zirconium resources produced by Mingrui Zirconium. The company still maintains a competitive advantage on the raw material supply side, laying a solid foundation for the company's continuous and steady development.