SINGAPORE May 22 Manhattan Resources Ltd , a Singapore-listed shipping firm controlled by Indonesian billionaire Low Tuck Kwong, said it plans to acquire a mining firm in Low's business empire for S$1 billion ($800 million), sending its shares sliding.
The hefty price tag to be paid by Manhattan Resources, which had a market cap of just over $310 million as of Wednesday, pushed its shares 15 percent lower to S$0.655, on track for their biggest daily fall since October 2010.
Manhattan, which is primarily engaged in shipping and logistics for the coal and resources industries in Indonesia, said it planned to take over Singxin Resources, which will own a Chinese company that has mining rights in the remote Xinjiang region after going through expected restructuring as a condition of the deal.
The Chinese company holds mining exploration permits in three concessions which contain chrome, serpentine and magnesia. Singxin is owned by a group of investors led by Low and an investment holding company controlled by Low and his children.
"This transaction allows us to foray into the potentially lucrative mineral mining industry and at the same time build up our knowledge of the industry. This transaction also helps us lay the path for our longer term goal to become a leading mineral resources group in the region," Manhattan Resources Chief Executive and Low Tuck Kwong's son Low Yi Ngo said in a statement.
($1 = 1.2521 Singapore Dollars) (Reporting by Rujun Shen; Editing by Edwina Gibbs)