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DEERFIELD BEACH, Fla.,
Aug. 11, 2011 /PRNewswire/ -- China Direct Industries, Inc. ("China Direct Industries") (NASDAQ:CDII), a U.S. based company that sources, produces and distributes industrial products in
China and the Americas in two core business segments, announced today that as of
August 8, 2011 it has entered into a definitive agreement to sell its 51% stake in Shanxi Pan Asia Magnesium Company ("Pan Asia") for
$3.05 million in cash to Bloomgain Investment Company, Ltd. ("Bloomgain"), a privately held British Virgin Island company.
The agreement was reached through the cooperation of Mr.
Haixin Zhao, and the other minority shareholders of Pan Asia, as a resolution to the dispute between the parties. China Direct has withdrawn the arbitration application filed with the China International Economic and Trade Arbitration Commission and will not pursue any legal actions with regard to Pan Asia, and confirms to release Mr. Zhao Haixin, Shanxi Jinyang Coal and Coke Group Co. Ltd. and Mrs. Runlian Tian from any future claims that may have resulted from this dispute from now on. Management anticipates the sale, which is subject to certain closing conditions, will take place in the near future and anticipates using the proceeds to expand its magnesium operations in
China and its U.S. based commodities trading operations as it continues to ship iron ore to
Mexico and begin shipments from
Commenting on the agreement Dr.
James Wang, Chairman and CEO of China Direct Industries, Inc., stated, "We are pleased to have reached a positive conclusion with regard to our interest in Pan Asia. We are also pleased that we were able to resolve a dispute resulting from what we believe were numerous misunderstandings caused by certain staff members at the time of the merger and acquisition that resulted in this unfortunate situation with Mr. Zhao and the other minority shareholders. We thank them for their help in putting our differences and those misunderstandings aside to enable us to reach this agreement with Bloomgain. Management apologizes for any difficulties experienced by them during the time of our misunderstanding, we wish them well in their future business endeavors and look forward to exploring further business opportunities with Mr. Zhao in the future. We are pleased to recover a significant portion of a previously written off investment in Pan Asia as we continue to execute on our business plan and achieve substantial growth in our magnesium and basic materials operations both in
China and the U.S."
About China Direct Industries, Inc.
China Direct Industries, Inc. (NASDAQ:CDII), is a U.S. based holding company with operations in
China and the Americas, focusing on pure magnesium production, distribution of basic materials and metal ores, and cross border corporate advisory services. Headquartered in
Deerfield Beach, Florida with corporate offices in
Shanghai, China Direct Industries' unique infrastructure provides a platform to expand business opportunities globally while effectively and efficiently accessing the U.S. capital markets. For more information about China Direct Industries, please visit