Sims Metal Management Limited, the world's largest listed metal and electronic recycling company (SimsMM), today announced that it has made a significant minority investment in Chiho-Tiande Group Limited (CTG) (HKG:976), a Hong Kong listed and fast growing metals and electronics recycler with operations in the People's Republic of China and Hong Kong.
With main processing facilities in Taizhou and Ningbo, CTG is the largest mixed scrap metals importer in China and operates three core businesses: a metal recycling business, foundry business and wholesale scrap metal brokerage business. CTG has expanded into domestic ferrous and non-ferrous scrap metal recycling in Shanghai and recently announced further expansion plans to Yantai on the Bohai Coast and Hong Kong with new metals and electronics recycling facilities.
SimsMM has acquired 16 percent of the existing shares of CTG from founder Chairman Ankong Fang and Delco Participation B.V. (Delco), a Netherlands-based scrap metal company. Delco has granted an option to SimsMM to acquire a further 2 percent of CTG. In addition, subject to approval by CTG’s independent shareholders, SimsMM will subscribe for a convertible bond and be issued warrants. After all instruments are exercised or converted, SimsMM expects to hold 20 percent of the fully diluted issued capital of CTG. In order to support the continued growth plans of the company, Chairman Fang and Delco will re-invest two-thirds of the proceeds received from SimsMM into convertible bonds issued by CTG on the same terms as SimsMM.
Daniel W. Dienst, Group Chief Executive Officer stated, “After several years of earnest evaluation of opportunities to enter the physical recycling arena on Mainland China and in Hong Kong, we have identified CTG as among the most exciting and attractive companies that will define and shape the nascent Chinese recycling landscape. Through our investment and partnership, we are validating not only CTG's extraordinary growth prospects under the vision of Chairman Fang and his leadership team but, as importantly, the shared cultures of our two companies manifested in unwavering commitments to creation of long-term shareholder wealth, the safety of our valued employees and the health of the environment and communities in which we operate and locate. CTG, as a long-standing trusted and honorable trading partner of SimsMM, made this investment decision that much more compelling."