Xingyun Liu, Lifan Wu and Jim Hatch wrote the case solely to provide material for class discussion. The authors tend not to intend to demonstrate either successful or ineffective handling of your managerial situation. The authors may possess disguised selected names and other identifying data to protect confidentiality. Richard Ivey School of Business Groundwork prohibits virtually any form of duplication, storage or perhaps transmission with no its created permission. Duplication of this material is not covered beneath authorization by simply any reproduction rights organization. To purchase copies or request permission to reproduce materials, contact Ivey Submitting, Richard Ivey School of Business Basis, The School of American Ontario, London, uk, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fernkopie (519) 661-3882; e-mail [email protected]
uwo. ca. Copyright © 2010, Richard Ivey School of Business Basis Version: (A) 2010-09-28
As the financial crisis became worse in early 08, the prices of base alloys, such as zinc and lead, declined significantly. As a result, many mining corporations suffered significant operating failures and skilled extreme problems obtaining financing from the capital markets.
Consequently, a few companies needed to either sell some of their possessions or locate a strategic client. In late The fall of 2008, Zhang Shuijian, the primary executive officer (CEO) of Shenzhen Zhongjin Lingnan Nonfemet Co. Ltd. (SZLN), fantastic management crew had determined an opportunity to get Perilya Limited (PEM), a base metal mining company on the Australian Securities Exchange (ASX). Before making a package, the team had to determine the strategic great things about this acquisition, the risks that could be incurred because of the purchase and the optimum price SZLN would be willing to pay. ABOUT ZINC AND LEAD1
Zinc is the fourth most frequent metal used, trailing simply iron, lightweight aluminum and water piping. About threequarters of zinc used is consumed because metal, primarily as a
coating to shield iron, metal and aluminum from corrosion. The resulting product is known as galvanized metal. Zinc is likewise frequently used as a great alloying metal to make duret� and brass, as a zinc-based die sending your line alloy and as rolled zinc. The remaining one-quarter of zinc is used as zinc compounds, generally by the rubber, chemical, paint and gardening industries. In 2008, global refined zinc production improved by 5. 1 % to 14. 9 , 000, 000 tons, and consumption simply by 3. 8 per cent to 11. eight million tons. Metal creation rose resulting from increased output in China and India. A fall in zinc consumption in Europe plus the United States in the past year was balance by elevated consumption in countries with emerging marketplaces, particularly Chinese suppliers, but likewise Brazil and India. Discovered zinc assets of the world were approximately 1 ) 9 billion tons. Lead is a very corrosion proof, dense and ductile metal, which has been being used for at least your five, 000 years. Concern with lead poisoning offers reduced the necessity for business lead in non-battery products. Usage of lead around the world was estimated to have increased by about 5 per cent in 2008, influenced primarily simply by strong 1
U. S. Geological Survey, Mineral Products Survey, 2009, at http://minerals.usgs.gov/minerals/, accessed 03 2010.
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economic progress in the technology, telecommunications and transportation sectors in China. Global business lead mine production in 08 was supposed to be a few. 8 , 000, 000 tons. Recognized lead solutions of the world totaled more than 1 ) 5 billion tons. Lately, significant business lead resources were found to occur in areas with deposits of zinc, silver, and copper. Because of this, lead p�pite were produced as a side product of exploration these other precious metals. In fact , zinc producers typically netted business lead revenues once calculating their very own zinc development cost. SHENZHEN ZHONGJIN LINGNAN NONFEMET COMPANY. LTD.
Cina non-ferrous Metal Industry Shenzhen Co., the predecessor of Shenzhen
Zhongjin Lingnan Nonfemet Company. Ltd. (SZLN), was founded in 1992 and went through many restructurings, together with a merger with Guangdong Shaoguan Lingnan Lead Zinc Group Ltd. Company. (Lingnan) in 1999. The major resources of Lingnan were the Fankou Business lead Zinc My own and the Shaoguan Smelter. During the combination, Lingnan was China’s largest lead zinc ore exploration company and China’s third largest business lead zinc smelter. In January 1997, the organization listed their stock on the Shenzhen Stock market and, after the amalgamation, changed its name to Shenzhen Zhongjin Lingnan Nonfemet Co. Ltd. (SZLN). SZLN’s largest aktion�r (at 35. 22 every cent) was Guangdong Growing Assets Management Co. Limited., a state-owned enterprise. Since 1999, business lead zinc products contributed approximately 80 % to profits, construction material and design 10 percent and trading approximately 6th per cent. As a result of an economic recession and continuously depressed with regard to lead and zinc, the amount paid of lead and zinc fell to historical levels, resulting, in 2001, in a decline in SZLN’s net gain of more than 75 per cent in comparison with 2000. In response, the company formed a new administration team with Zhang Shuijian as the brand new CEO. This kind of team implemented stringent expense controls and restructured the organization to make lead and zinc products you can actually main target. As a result of this restructuring, net income in 2002 increased by simply more than 40 per cent over the previous 12 months, despite the low metal prices. By the end of 2006, the values of lead and zinc metal had been at their highest levels in two decades (see Displays 1 and 2 intended for historical business lead and zinc prices). Roughly 55 per cent of domestic zinc was used in hot-dip galvanizing.
Mainly because additional galvanizing units had been expected to be put into procedure, the demand for zinc was expected to develop continuously. In 2006, domestic ingestion and exports of lead-acid batteries, the key lead-consuming industry, had elevated by twenty per cent and 35 %, respectively above 2005 amounts. On the source side, capability growth was constrained by a lack of high-quality mines and limited smelter capacity. SZLN forecasted that the growth craze in the demand for lead and zinc items would continue and, thus, increased it is annual capacity to 180, 500 tons of lead zinc ore and four hundred, 000 a great deal of metal goods. This enlargement was loaned by providing 60 , 000, 000 new shares from which SZLN received earnings of RMB700 million. Result of ore in 2007 was approximately 99, nine hundred tons of zinc and forty five, 500 plenty of lead. Metallic output was 181, five-hundred tons of zinc metal companies 92, 2 hundred tons of business lead electrodes. As a result, the company was instructed to purchase ore from both domestic and international businesses to nourish its making operations. The values of lead and zinc in 2007 fluctuated just like a roller coaster. In a review of the competitive condition in 08, SZLN built the following important observations:
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• • •
•
According to the info, the total capability of the top domestic business lead zinc corporations was lower than 50 percent of domestic total ability, which mentioned a fragmented industry. In 2007, upstream companies widened downstream, and several downstream corporations extended to upstream business, illustrating a trend to vertical incorporation. Industry competition intensified because of capital industry developments. As the stock market acquired performed abnormally well in 3 years ago, many companies got taken the chance to issue added shares to make money to get possible merger and purchase opportunities. SZLN also raised money so it could broaden, in hopes of surviving the imminent industry loan consolidation. Clearly, the government intended to combine the market. As a result SZLN would likely possibly acquire other companies or can be acquired
SZLN’s share with the segment’s total gross profit reflected the company’s changes in emphasis over time pertaining to various product lines (see Show 3). The latest financial statements for SZLN are proven in Shows 4 and 5. LATEST ACQUISITION ACTIONS
In Summer 2008, SZLN acquired a 55 percent equity risk in Wuxuan Panlong Business lead Zinc Co. Ltd. (Panlong Mine) in a price of RMB341 , 000, 000. According to data offered by the Nutrient Resources and Reserves Evaluation Center of China’s
Ministry of Natural Methods, Panlong My very own contained nineteen. 7 million tons (Mt) of ore, 3. 31 per cent quality of zinc and 1 ) 05 % grade of lead. Offered these estimates, the total of contained precious metals was 0. 86 Mt. 2 Since September 35, 2007, the evaluated net assets of Panlong Acquire were RMB620 million. 3 Another takeover attempt inside the overseas market had not been accomplished. In late Dec 2007, Dalam negri Bumi got announced a hostile takeover offer for Sydney Herald Resources Limited (Herald) at AU$2. 25 cash per talk about. The main advantage of Herald was an 80 per cent share in the Dairi task, which was positioned in Indonesia. As of June 30, 2007, the web assets from the project had been estimated to get a value of AU$138 million. According to the story, the Dairi project comprised 17. 3 Mt of lead and zinc ore, with 13. 1 per cent grade of zinc and 7. 6th per cent class of lead, ranking as the planet’s largest preproduction-stage lead zinc mine. Reacting, on January 30, 2008, SZLN and Indonesia PT Antam Tbk (Antam) create a Special Purpose Vehicle (SPV) in Singapore — String Co. — which has announced a tender for a lot of outstanding stocks and shares of Herald (there had been 202 million shares outstanding) at a price of AU$2. 50 funds per talk about. The give was conditional on Tango acquiring more than 40. 1 percent of the stocks and shares of Herald. Tango brought up the soft offer value twice in June; nevertheless , on July 15, Herald announced it would accept Bumi’s unconditional soft offer, of AU$2. 85 per reveal, and SZLN gave up the takeover look at. In mid-November 2008, SZLN received information that PEM was seeking a strategic client, leading to a prompt response from Zhang and the managing team. Because of the financial hardship, lead and zinc rates had lowered dramatically, and PEM’s stock price got crashed via AU$2. sixty four per share at the beginning of 08 to AU$0. 15 per share in mid-November. Additionally , the Australian dollar acquired depreciated by simply onethird in accordance with the Chinese language renminbi compared to six months previous.
2 3
The contained metals were computed as follows: contained precious metals = nineteen. 7 Mt × three or more. 31% + 19. several Mt × 1 . 05% = 0. 86 Mt. The assessed net possessions method values the collateral of a organization on the basis of the fair the true market value of its assets fewer its debts. This method is at contrast towards the discounted income method, which values the equity at the moment value of future free cash
flows to equity.
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PERILYA LIMITED
Perilya Limited (PEM) was an Aussie base precious metals mining and exploration organization, listed on the Australian Securities Exchange. It operated the Iconic zinc, lead and silver my own in Cracked Hill, Nsw. PEM’s functions also included the Flinders Task in To the south Australia as well as the Mount O2 Project in Queensland. The financial statements and key shareholders of PEM are shown in Exhibits 6th, 7 and 8. Founded in 1987, PEM experienced grown rapidly since its acquiring the Fortnum Gold Mine in 1994. Till the seal of the Fortnum Gold Mine in 2001, PEM embarked on an assessment and acquisition program. Busted Hill, one of many largest and the most renowned zinc, lead and silver puits in the world, was acquired in-may 2002. As of June 35, 2008, the combined Broken Hill ore reserve was 10. 02Mt at an normal grade of 6. one particular per cent zinc, 4. your five per cent lead and 46. 7 grams per charge (g/t) of silver. Substantive mineral assets could possibly be converted to ore reserves at a later date, which could extend the life of the Cracked Hill operation. 4 PEM’s Broken Mountain operation included the Southern Operations, the North My own and Fortuna Exploration Decrease, with a 2 . 8 Mt concentrator. Zinc and lead concentrate developed was sent by train to Interface Pirie in South Sydney, from which the zinc concentrate was transported to Korea Zinc in South Korea (based with an agreement that was to expire in December 2012), plus the lead concentrates were in that case sold to NyStar (based on an agreement that was to run out in Dec 2009) and processed by Nystar’s smelter in Interface Pirie.
Supervision of SZLN noted that if an buy by SZLN took place, the ore could possibly be economically shipped to SZLN’s underutilized smelters after these kinds of contracts out of date. PEM’s procedures also included the Flinders Task in South Australia plus the Mount Oxide Project in Queensland. A total of 316, 400 loads of immediate shippable zinc silicate ore had been extracted and stockpiled in Flinders, and approximately one-third than it had been marketed by June 2008. PEM owned 90 per cent in the Mount O2 copper job. On Sept 10, 08, PEM come to an agreement with Chalice Gold Mines Limited (CHN) intended for Chalice to acquire PEM’s 100 per cent affinity for the Support Oxide project in return for 200 million Chalice ordinary shares. 5 Yet , because the capital market was severely depressed and the water piping price decreased, Chalice requested a termination of the package. PEM approved Chalice’s obtain on August 24, 2008, at which period CHN’s stock price was AU$0. 07 per reveal. On March 5, 08, the table of PEM announced both the appointment of Patrick O’Connor, the former non-executive chairman, because the exec chairman, as well as the board’s start of a technique of reviewing proper options for maximizing aktion�r value. The objective would be to improve the company’s development strategy and pursue combination and buy opportunities. About February twenty-one, 2008, PEM disclosed that discussions experienced taken place with regards to a potential combination between PEM and CBH Resources Limited (CBH). The merger pitch endorsed simply by boards of both sides was publicized on March dua puluh enam. During this time, a number of key supervision personnel for PEM resigned. Due to the consistently falling foundation metal rates and raising operating costs (net money costs in Broken Hill increased by US$0. seventy five to US$1. 03 every pound of zinc during fiscal year 2008), monetary conditions of
4
Functional mineral methods as discussed in this case range from the proven ore reserve, additionally to indicated and inferred resources. When a company can be fortunate, you see, the reserve might be much higher than the reported reserve. A lower probability exists that the actual arrange will be below reported. The information on nutrient resources were reported according to the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. a few CHN’s shares were trading at AU$0. 12 per share around this date, producing the transaction worth AU$24 million.
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PEM extended to degrade. On August 21, PEM released a Broken Hillside operation resizing plan that included this: • • • • • • •
A reduction in output to annual production of approximately 55, 000 loads of contained zinc6 and 50, 500 tonnes of contained lead Higher zinc grades of 6. 5 per cent and lead levels of 6. 0 percent on the back of increased remnant pillar development (compared with current degrees of a few. 8 % zinc and 3. your five per cent lead) Exposure to place prices, with hedging restricted to quote period hedging7 and the use of option contracts Reduction in staffing amounts from 760 to 320 persons at a total cost of AU$20 mil Lower capital and advancement expenditures for fiscal season 2009 forecast at AU$25 million minimizing to AU$15 million in fiscal season 2010 Reduced exploration expenditures within the Broken Hill location Further expense reductions on the corporate hq (another part of key administration personnel retired in September)
According to PEM’s release, the predicted cash costs of creation as a result of the revised creation plan could decrease to US$0. 70 and US$0. 65 per pound of zinc. Tanker O’Connor was also offered as stating: The Company is usually confident the Broken Slope Operation can be sustained to keep a level of continuity of production and one that is financially viable at current metal rates for at least another two to three years without significant compromise for the longer-term your life of the my very own. UNSOLICITED TAKEOVER OFFER VIA CBH RESOURCES LIMITED
CBH Resources Limited (CBH) was an Australian-listed resource firm with a great operating basic metal mine at Cobar and a fresh base material (i. at the., zinc, business lead and silver) development in Panorama and Broken Mountain (see Displays 9 and 10 to get CBH’s economical statements). CBH’s Broken Slope mine was located in the center of PEM’s Broken Hill mining location (see Show 11). Upon March 26, 2008 PEM and CBH announced a combination plan, through which CBH shareholders would obtain one PEM ordinary share for every 3 CBH stocks they held and 1 PEM reveal purchase means to fix every 20 CBH shares they organised. Immediately following completing the recommended merger, PEM shareholders will own
approximately 41 per cent of the combined group, and CBH shareholders would own the harmony of approximately fifty nine per cent. The combined companies would be the world’s ninth most significant zinc maker. The recommended merger was expected to create important rewards for shareholders in the two companies. The merger could unify Cracked Hill possession and drastically enhance functioning efficiencies, such as increasing through-put at PEM’s concentrator8 of up to about 2 . 8 Mt per annum (from the current amounts of about 1 . 8 Mt per annum), adding material life to Broken Slope mining through efficient use of combined assets and remnant ore. The combined group would have opportunities to reduce corporate overhead
6th
Annual development is measured by the volume of metal made, which in turn is usually equal to the tons of ore multiplied by average quality of the ore. 7 Offer period hedge is used to hedge resistant to the price changing between the period the company submits the estimate and the time the customers accept the quote. almost eight A concentrator separates useful ore via waste ore.
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manage a quality profile of base metal property at different stages of development, create a significant global zinc and lead developer and enhance equity marketplace scale and ongoing liquidity. However , about June twenty four, 2008, the board of CBH advised that it got “been up to date by PEM that the merger is not likely to be finished within the first timeframe of 25 Aug 2008. ” Subsequently CBH submitted to PEM a revised merger proposal of 3. 5 CBH shares to get 1 PEM share, which has been also turned down despite a very good logic intended for merging both companies. CBH claimed that “the Perilya board provides rejected CBH’s offer around the basis that it can be considered to be ‘inadequate’ even though it is usually superior to the present merger terms that they have suggested. ” CBH found this position “astonishing and illogical. ” PEM given a multimedia release about the same date, which in turn listed the explanation for
rejecting the CBH takeover proposal, such as the following: • • • • • •
CBH had recently announced major changes to the operations whilst PEM “has had limited opportunity to effectively evaluate the changes”9 Erosion from the anticipated immediate merger benefits as a result of the decline in commodity rates and anticipated delays to CBH’s Rasp project approvals10 An suggested lack of support from several CBH notice holders Holds off to CBH’s independent authorities report Just lately reported query results from PEM’s Mount O2 copper job that enhanced the value of PEM’s assets “CBH… is relatively unhedged. “
Around the first working day after PEM issued their annual survey for fiscal year 08 (ended in June 30), CBH announced a tender give of some. 2 CBH shares pertaining to 1 PEM share, which represented reduced of approximately 13. 7 percent more than the recent PEM talk about price. In the event 100 per cent of the equity was obtained, PEM shareholders would own approximately twenty four. 5 per cent of the combined company and CBH investors would personal approximately fifty-one. 5 %. The plank of PEM advised shareholders to “take no actions, ” mainly because “CBH might expose Perilya shareholders to additional dangers, including CBH’s high money cost property and around $200 million in debt with associated debt-servicing costs inside the order of $15 million per annum. ” CBH filed a bidder statement in November doze, and PEM’s board necessary to release their target affirmation in response ahead of December 12, to suggest its investors to accept or perhaps reject the CBH offer, or support the distribution of a new proposal. The significant events relating to this merger settlement are described in Display 12. OPPORTUNITY FOR SZLN WITH PEM
As lead and zinc prices continued declining, PEM found greater operational and economical pressures. Even though PEM experienced reduced their production and staffing amounts, maintaining it is operational cashflow and necessary basic capital expenditures continued to be a difficult job. If the p�pite mined had been of lower grade CBH responded, “there are no different material alterations at any of its procedures…. Indeed, it is surprising that Perilya can be yet to respond to the new decline in metal rates in respect of its very own operations at Broken Slope. ” 12 CBH acquired undertaken a great
environmental assessment and submitted a project application underneath the Environmental Analysis Act. When completed, the business would have endorsement for start of operations at its recently developed Rasp mine. 9
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than had been believed, PEM would probably be in short supply of cash and, thus, may well fail to pay the interest or principal about its outstanding debt. The CBH takeover threat further more aggravated the pressure upon PEM’s supervision. Patrick O’Connor, who was looking for a strategic entrepreneur, connected in November 08 with SZLN at the Cina Mining 2008 convention in Beijing. By SZLN’s perspective, the ore mined by simply SZLN was not enough to get SZLN to fully utilize their smelting capacity. Also, even though commodity rates had dropped greatly since the financial crisis, the management of SZLN was confident that mineral solutions would be scarce in the long run. In line with the analyst reports of many major expenditure banks, zinc and lead prices would recover within the next several years. The forecasted zinc prices had been US$1, two hundred fifty, 1, 600 and a couple of, 200 every tonne last year, 2010 and 2011, correspondingly. 11 If the acquisition of PEM were effective, some further synergistic results would effect, although they can be difficult to assess. For example , since PEM was a world-known business lead zinc mining company, SZLN would gain the platform it needed to accomplish international development (such as acquiring worldwide resources or making foreign direct investments). SZLN and PEM every single had particular advanced mining technologies, which usually provided a sharing opportunity. PEM also had functional and bureaucratic efficiencies that SZLN can learn from. Based upon the presumptions of SZLN management and those of the case authors, a prediction of U. S. buck cash moves for the next three years was produced (see Exhibit 13). Almost all revenues had been in U. S. us dollars, whereas a number of the operating costs were in U. T. dollars and some in Aussie dollars.
Intended for purposes in the forecast, the Australian costs were changed into U. S i9000. dollars at the assumed area rate. To simplify the forecast and the valuation, business lead prices and production weren’t modeled independently. Instead, in line with industry practice, net revenues from business lead operations had been used to counter the operating costs. Capital expenditures included payments for mine houses and for real estate, plant and equipment. Although not relevant to get the fairness valuation, the company estimated it will need at least AU$15 million within the next year to conduct even more exploration of it is properties. The life span of the outstanding ore supplies was approximated to be about eight years (starting by 2009), given the future material price presumptions. As observed in Exhibit 13, some personal debt was presumed to be paid back in 2009 and 2010, nevertheless no further financial debt repayments had been assumed from 2011 to 2015. The rest of the debt of US$9. 05 million was to be repaid at the end of 2016. Interest rates were thought to be the same between 2011 and 2016. REGULATORY ENVIRONMENT
Many regulatory uncertainties encircled the deal even if both managing teams could reach agreement. SZLN will need to receive approval from Chinese regulators, its largest China shareholder, Aussie regulators plus the shareholders of PEM. Nationwide Development and Reform Percentage (NDRC)
China’s various sectors were remarkably regulated with a number of point out and provincial agencies. For example , the Countrywide Development and Reform Commission (NDRC) was obviously a macroeconomic administration agency within the Chinese Point out Council together powerful and broad administrative and planning control eleven
Source: Inner data of SZLN; one particular tonne sama dengan 2204. 6 pounds.
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over the Chinese language economy. The NDRC’s functions were to study and formulate policies pertaining to economic and social advancement, to maintain the balance of financial development and guide reorganization, rearrangement, reshuffling of China’s economic system. Of direct curiosity to SZLN, the NDRC was in charge of the formula of thorough industrial procedures. In 3 years ago, the NDRC produced a report on
“Access Requirements of the Business lead and Zinc Industry, ” which centered on the need to consolidate the companies with this extremely fragmented space. SZLN was stimulated with this report develop the company. The firm’s strategy set in early 2008 was to “focus around the lead zinc industry, prioritize the development of mines, emphasize supervision of smelters, and build a great internationally-competitive business lead zinc group company. ” In addition , the NDRC experienced issued “Interim Measures intended for the Supervision of Examination and Endorsement of International Investment Projects” in 2004. This file noted that “overseas expense projects in resource advancement… in which the Oriental party spends an amount of US$30 million or maybe more… shall be be subject to examination and approval from the NDRC. ” Overseas expense projects of US$30 , 000, 000 or less were to be subject to the exam and acceptance of the comarcal development and reform commissions. NDRC explained that the purposes of “The Measures” would have been to improve the orderliness and efficiency of Oriental administration in the overseas purchase, to enhance the “go global” strategy, to promote Chinese enterprises expanding offshore and to shift investment programs. The get global strategy of the govt included making a favorable environment for direct foreign expenditure and cultivating international control. Given the recent international financial crisis, this place appeared to offer many opportunities. China State-Owned Assets Oversight and Supervision Commission (SASAC)
Another key regulatory agency was the State-Owned Assets Oversight and Government Commission (SASAC). This organization was required to perform investor’s responsibilities with respect to state-owned businesses. SASAC shouldered the responsibility of supervising the preservation and increments for the value with the state-owned assets by the monitored enterprises. It guided and pushed ahead the reform and reorganization, rearrangement, reshuffling of state-owned enterprises, advanced the institution of modern organization systems, increased corporate governance and propelled the ideal adjustment in the layout and structure from the state overall economy. SASAC was the sole shareholder of Guangdong Rising Possessions Management Company. Ltd, that has been SZLN’s greatest shareholder. To conclude, the Chinese regulatory specialists were worried about such aspects as this: • • • •
The safety and return around the investment of SASAC The efficient usage of foreign exchange supplies The politics relationship with all the investee region Enhancing Chinese competitiveness and consistency with all the country’s move global approach
Australia Overseas Investment Assessment Board (FIRB)
In recent years, several large-scale international mergers and acquisitions started by Chinese language companies have been thwarted. For example , China Countrywide Offshore Petrol Corporation (CNOOC) had cancelled its proposed takeover of Unocal because of resistance through the U. S. Congress, and Australian Rj Tinto acquired
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declined the acquisition of Chinalco. Hence, receiving acceptance of the foreign regulators was important for the proposed purchase. Australia was a world-leading query and exploration country. The other Investment Assessment Board (FIRB) examined plans by international interests to attempt direct expenditure in Australia and made recommendations for the government on whether all those proposals were suitable for authorization under the government’s policy (no FIRB examination was necessary if below 15 percent of the equity was to become acquired). The Australian government’s guidelines intended for the study of foreign purchases included the next key elements: 12 1 . The other investment must be consistent with Australia’s national curiosity. 2 . Although investments simply by foreign federal government entities happen to be permitted, the investor’s operations must be independent from the relevant foreign govt and need special concern. This qualifying criterion reflects the simple fact that buyers with links to international governments might not exactly operate exclusively in accordance with usual commercial concerns and may rather pursue larger political or perhaps strategic goals that could be unlike Australia’s nationwide interest. several. An investor can be subject to and must stick to the law and observe prevalent standards of business tendencies. 4. An investment may not impede competition or lead to unnecessary concentration or control in the market or groups concerned. five. An investment should not negatively have an effect on Australian authorities revenue or perhaps other policies. 6. A great investment must not affect Australia’s nationwide security. 7. An investment must not negatively affect the operations and directions of your Australian organization or their contribution for the Australian economy and larger community. Crucial interests here would contain impacts on imports, exports, local processing of supplies, research and development and industrial contact. Cultural Questions
Besides the usual risks associated with acquisitions were numerous managerial and ethnic issues related to cross-border acquisitions by Chinese companies. Although Chinese companies had accomplished numerous purchases, non-e had been especially effective. For example , the acquisitions of Alcatel and Thomson by TCL, the IBM LAPTOP OR COMPUTER business by simply Lenovo plus the 50 % equity of Fortis Investment by Ping An Insurance were occuring huge loss or showing an failure to modify. These not successful acquisitions wasn’t able to be dismissed by SZLN. On the other hand, it truly is useful to remember that the The english language language capabilities of the SZLN management group were quite good. PURCHASING THE BUY Where Might the Money Are derived from?
Because of SZLN’s alignment with Chinese federal government strategy, their relatively good financial structure, its romance with Chinese banks plus the cash flow prospective customers from the expense, SZLN predicted it 12 Government of Australia, “Release of a Set of Principles to boost the Visibility of Australia’s Foreign Expenditure Screening Plan, ” pr release by the Hon. Wayne Swan, Treasurer with the Government of Australia, March 17, 08.
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could borrow enough U. S. dollar cash from Chinese language banks to help make the acquisition in cash if perhaps required. Because SZLN acquired raised approximately US$90 million equity money in late 2006 and had accrued profits in 2006 and
2007, their liabilities–assets ratio had reduced from about 70 per cent to 60 per cent within the 2006-2007 period. This economic slack provided the company having a degree of overall flexibility to take on this opportunity. However, the future funds needs of PEM will have to be considered contracts the deal. One more potential source of funds is the issuing, once again, of new shares on the stock exchange. However , this choice did not seem to be feasible because the stock issuance of China public companies was carefully regulated and took a relatively long time (approximately six months) to procedure. A third potential option was going to offer to change newly granted SZLN stocks to the cases of PEM shares. Yet , in addition to the time essential gain acceptance, SZLN was authorized to issue simply class A shares, which in turn only mainlanders and chosen foreign institutional investors were allowed to trade. Alternative Offer Structures
While considering the form of acquisition, SZLN anticipated for least 3 possibilities: giving a cash tender available in the market, purchasing recently issued PEM treasury stocks directly from the organization to become the biggest shareholder, and financing the purchase with convertible you possess and then changing the provides into prevalent shares at some future time. Offering to acquire PEM stocks for money in the second market was expected to always be very difficult and carried a very uncertain outcome (unless a considerable premium was paid) because the current inventory price was perceived by PEM shareholders to be extremely low. The direct acquiring PEM treasury shares got the advantage of offering a new injections of collateral capital in PEM; however , key issues would be the cost and amount of control held by the acquirer. The convertible relationship alternative would reduce the risk to the acquirer because, in the case of liquidation, a bond positions higher than value. However , this type of financial instrument had low liquidity, plus the conversion prices would be hard to negotiate. Even more difficult was picking out the right change timing to ensure that SZLN may gain control. THE DECISION
Zhang Shuijian and his guys needed to design an buy proposal that could increase the long lasting value of SZLN, satisfy the requirements of both Chinese and Australian regulators, and satisfy the panel and investors of
PEM. On November twenty eight, 2008, the Australian five-year Treasury connection interest rate was 3. ninety-seven per cent, as well as the 10-year Treasury bond interest was 5. 58 percent. The most recent inventory price of PEM was AU$0. 18 per reveal, and 196, 882, 640 shares were outstanding. The Australian money exchange price was AU$1. 5249 = US$1, and the U. T. dollar exchange rate was RMB6. 8349 = US$1. Selected talk about prices and exchange prices are demonstrated in Demonstrate 14. Lifan Wu can be described as Professor by College of Business and Economics, California State School, Los Angeles. Xingyun Liu is known as a Lecturer at Lingnan University, Sun Yat-Sen University.
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Exhibit you LONDON METALLIC EXCHANGE ZINC INVENTORY AND SPOT SELLING PRICE, 1989–2008
13, 000 doze, 000 12, 000 almost 8, 000 six, 000 some, 000 2, 000 zero
5000 4500 4000 3500 3000 2300 2000 1500 1000 five-hundred 0
nineteen 89 –
Source: Guosen Securities Base Metals Sector database
zero 19 you 90 -0 1 19 91 -0 19 one particular 92 -0 1 nineteen 93 -0 1 19 94 -0 19 one particular 95 -0 1 nineteen 96 -0 19 one particular 97 -0 1 19 98 -0 19 you 99 -0 1 twenty 00 -0 1 20 01 -0 20 1 02 -0 1 twenty 03 -0 20 1 04 -0 1 twenty 05 -0 20 one particular 06 -0 1 20 07 -0 1 20 08 -0 1 Zn LME Inventory Mt Zn LME location price US$/t
Exhibit two LONDON STEEL EXCHANGE LEAD INVENTORY AND SPOT COST, 1989–2008
some, 000 3, 500 a few, 000 a couple of, 500 a couple of, 000
4500 4000 3500 3000 2500 2000
you, 500 one particular, 000 five-hundred 0
01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 20 07 20 06 20 goal 20 02 19 99 19 98 19 94 19 96 19 90 19 91 19 fifth there�s 89 19 93 19 ninety two 19 ninety-seven 19 ninety six 20 01 20 00 20 05 20 04 20 08 01 01
1500 1000 500 0
Pb LME Inventory Mt
Pb LME spot value US$/t
Source: Guosen Securities Base Metals Industry databases
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Demonstrate 3 SZLN GROSS MARGINS BY SEGMENT AND CATALOG AS A PERCENTAGE OF TOTAL GROSS PERIMETER, 1999–2006
1999 Gross Margin Rate Lead & Zinc Trading Constructional Material & Decoration Travel Real Estate High end. Products % of total gross perimeter Lead & Zinc Trading Constructional Material & Decor Transportation Real-estate High-tech. Goods Total twenty-one. 4% several. 7% 20. 3% 64. 3% 53. 6% –
2000 24. 0% six. 8% 18. 1% 63. 7% twenty eight. 8% –
2001 19. 9% 3. 8% seventeen. 7% sixty six. 3% twelve. 5% 13. 3%
2002 17. seven percent 5. 6% 15. 2% 69. 2% -25. 6% 28. 5%
2003 of sixteen. 2% -1. 1% 13. 0% fifty eight. 6% 15. 4% 20. 7%
2004 28. five per cent 3. 8% 10. five per cent 55. 8% 6. 0% 14. 0%
2005 twenty eight. 9% 1 . 2% 12. 5% 50. 4% 79. 2% 13. 5%
2006 37. 3% 7. 0% 12. 3% 38. 3% 20. 8% 11. five per cent
79% 12% 7% 2% 0% 0% 100%
80 percent 10% 6% 2% 3% 0% 100%
77% 12% 7% 2% 1% 0% 100%
83% 14% 1% 3% -2% 2% completely
79% 10% 0% 2% 6% 3% 100%
88% 7% 0% 1% 1% 2% totally
90% 6% 0% 1% 0% 2% 100%
95% 3% 0% 0% 0% 1% completely
Note: Quantit�s do not help to increase 100% due to rounding. Supply: Compiled by writers with information from gross annual reports of SZLN.
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9B10N007
Exhibit some SZLN CONSOLIDATED BALANCE SHEETS, 2004–2008 (IN MILLIONS OF RMB)
Year Cash Accounts receivable Other receivables Inventory Various other current possessions Current Property Long-term purchases PP&E Intangibles Other long lasting assets Total Assets Immediate debt Accounts payable Improvements Salary payable Tax payable Other current liabilities Current Liabilities Long lasting debt Other long-term financial obligations Total Debts Common Inventory Retained earnings
Minority interest Total Equity Total Liabilities & Equity Note: PP&E = property, flower, and products
2004 599 297 77 1, 204 103 two, 280 388 2, 169 108 a couple of 4, 947 2, 404 277 177 19 61 142 3, 079 412 132 several, 623 916 298 one hundred ten 1, 324 4, 947
2005 532 267 33 1, 267 88 a couple of, 186 371 2, 093 98 four 4, 753 2, 164 260 109 35 twenty three 156 two, 748 460 14 a few, 222 918 521 ninety two 1, 531 4, 753
2006 1, 418 334 50 two, 476 204 4, 482 384 a couple of, 245 87 1 several, 198 1, 951 267 94 sixty one 171 127 2, 671 1, 180 22 several, 873 you, 705 one particular, 525 95 3, 325 7, 198
2007 you, 326 327 145 2, 467 206 4, 470 574 2, 516 127 247 7, 934 2, 091 259 152 151 300 349 3, 302 180 689 4, 171 2, 025 1, 557 182 three or more, 763 six, 934
2008 859 240 74 1, 915 452 3, 539 276 3, 217 721 166 six, 920 990 278 131 149 (12) 731 2, 267 1, 000 677 3, 944 2, 085 1, 483 407 3, 976 six, 920
Resource: Compiled by writers with details from twelve-monthly reports of SZLN.
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9B10N007
Exhibit five SZLN CONSOLIDATED INCOME CLAIMS AND IMPORTANT FINANCIAL SYMPTOMS, 2004–2008 (IN MILLIONS OF RMB)
Year Revenue COGS Florida sales tax and Others Low Profit Selling Expenses G&A Expenses Different Operating Salary Financial Expenditures Investment Income Inventory Write-Offs Others Pretax Income Tax Fraction Interest Net Income EPS (in RMB) OCF per Discuss (in RMB) Total Liab. /Total Property ROE
2004 3, 548 (2, 664) (33) 852 (60) (442) 9 (129) (28) (0) (3) 199 (57) (6) 137 0. 32 1 . 05 73. 2% 11. 7%
2005 4, 237 (3, 105) (32) you, 100 (60) (524) eleven (125) (37) (0) (34) 331 (47) (6) 277 0. sixty four 1 . 07 67. 8% 21. 0%
2006 6th, 240 (4, 058) (41) 2, 141 (56) (548) 16 (144) 41 (0) (81) 1, 370 (232) (4) one particular, 135 1 . 71 zero. 16 53. 8% fifty five. 6%
2007 8, 257 (5, 893) (75) 2, 289 (84) (525) 1 (118) 126 (249) (24) 1, 416 (202) (10) 1, 205 1 . sixty-five 1 . forty-nine 52. 6% 41. 3%
2008 several, 442 (5, 844) (90) 1, 508 (96) (531) 14 (257) 103 (220) (2) 518 (113) (5) 400 zero. 39 1 ) 58 forty-nine. 8% 12. 5%
Note: COGS = Cost of Items Sold; G&A = Standard and Administrative; EPS sama dengan Earnings per Share; OCF = Working Cash Flow; ROE = Go back on Collateral Source: Compile by creators with information from total annual reports of SZLN.
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9B10N007
Exhibit 6th PEM CONSOLIDATED BALANCE LINENS, 2004–2008 (IN MILLIONS OF AU$)
Note Funds & Short-Term Investment Accounts Receivable Products on hand Other Current Assets Current Assets Fixed Assets Additional Long-Term Property Total Property Short-Term Debt Accounts Payable Tax Payable Other Current Liabilities Current Liabilities Long-Term Debt Various other Long-Term Debts Total Financial obligations Stock & Capital Excessive Retained Earnings Shareholders’ Collateral Total Debts & Fairness
1 2
2004 thirty-three 8 10 6 49 118 17 193 21 20 0 12 58 9 twenty-eight 95 79 21 99 193
2005 21 being unfaithful 13 two 45 132 11 one eighty eight 5 twenty-five 0 13 43 8 21 seventy two 99 16 115 one eighty eight
2006 145 22 twenty-two 6 one hundred and eighty 125 37 342 5 34 twenty eight 59 125 3 83 211 sixty four 68 131 342
3 years ago 152 31 15 24 221 168 60 449 10 46 27 112 195 a few 99 three hundred 26 123 149 449
2008 67 2 23 142 242 46 19 308 twenty 21 0 86 127 6 27 160 169 21 148 308
three or more
4
Take note: 1 . Other current resources mainly incorporate derivative economical instruments, including metal options contracts, metal options and forex options. installment payments on your Fixed property include pursuit, development and evaluation expenses, mine homes in use, PP&E. Because of the resizing in 08, fixed possessions balance decreased after the AUD 173 million write-off. several. Other current liabilities generally include derivative financial devices, other payables and deferred option monthly premiums. Comparing for the end of FY2007, the balance of derivatives at the end of 2008 decreased by AUD 91m, various other payables improved by AUD31m, and deferred option premiums increased simply by AUD30m. some. Other long-term liabilities include derivative economical instruments, conditions, and pre-paid income. “On the back from the resizing from the Broken Mountain Operation, the corporation reviewed the balance of the deferred silver earnings relating to the up-front takings received coming from Coeur d’Alene Mines Company. in Oct 2005. Under the agreement with Coeur D’Alene, there were approximately a further 12. 5 mil ounces of silver outstanding at 35 June 08. Accordingly, the business has booked a pre-tax credit of $36. 034 million resulting from the re-estimate of metallic production under the current resized operating prepare. In the event that the business re-establishes improved production past its current operating strategy, it will always deliver sterling silver to Union d’Alene relative to its commitments. ” Be aware: PP&E sama dengan property, herb, and gear; FY = fiscal yr. Source: Published by authors with information from annual reports of PEM.
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9B10N007
Show 7 PEM CONSOLIDATED CASH FLOW STATEMENTS AND OPERATING STATISTICS, 2004–2008 (IN MILLIONS OF AU$)
Note Revenue Raw materials, electrical power and consumables used Worker benefits price Depreciation & Amortization Exterior services and consultants Freight and Managing Impairment Losses Finance Costs Other expenditures (Loss)Profit b/f income tax Income tax and other Net Profit/(Loss) EPS (in AUD) Net Operating Cash Flow Net Investing Earnings including: CapEx Net Funding Cash Flow Production of Zinc (tonnes) Creation of Lead (tonnes) 1
2004 158 (51) (37) (18) (27) (20) (9) (1) twenty four 18 5 13 zero. 08 being unfaithful (4) (30) 0 150, 400 fifty four, 500
2006 191 (50) (45) (20) (28) (22) (1) (4) (27) (7) (2) (5) (0. 03) 30 (48) (42) (1) 132, 1000 61, 100
2006 345 (55) (51) (36) (37) (26) (20) (3) (19) 98 31 67 0. 35 166 (47) (47) (6) a hundred and forty four, 100 seventy four, 800
2007 387 (71) (70) (36) (43) (21) (6) (8) (18) 116 33 82 0. 40 132 (78) (77) (32) 92, 75 60, 500
2008 273 (31) (81) (48) (50) (31) (188) (13) 1 (168) (28) (140) (0. 72) (10) (60) (100) (11) 91, 300 52, 400
two
3
Take note: 1 . “Raw materials, power and consumables used” contains the “changes in stocks of finished goods and work in improvement. ” 2 . “Others” identifies “Profit/(loss) coming from discontinued operations. ” several. “Capex” involves payments pertaining to mine houses; payments for property, grow, and tools; and
payments intended for exploration and evaluation. Notice: EPS = earnings per share; CapEx = capital expenditures; PP&E = home, plant, and equipment. Origin: Compiled by writers with information from gross annual reports of PEM.
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9B10N007
Exhibit almost 8 TOP 10 INVESTORS OF PEM
2007-6-30 Shareholder Identity HSBC Custody Nominees (Australia) Limited Citicorp Nominees Pty Limited ANZ Nominees Limited J P Morgan Nominees Australia Limited National Nominees Limited CS Fourth Nominees Pty Limited HSBC Guardianship Nominees (Australia) Limited AIR-CONDITIONING 2 Cogent Nominees Pty Limited HSBC Custody Candidates (Australia) Limited GSI ECSA CPU Discuss Plans Pty Limited Source: PEM 3 years ago and 08 annual studies.
% 18. 54 twelve. 35 being unfaithful. 13 being unfaithful. 07 eight. 18 4. 58 installment payments on your 28 2 . 17 1 ) 41 1 ) 24 sixty six. 95
2008-6-30 Shareholder Brand ANZ Candidates Limited (Cash Income A/C) HSBC Custody Nominees (Australia) Limited Citicorp Nominees Pty Limited JP Morgan Nominees Australia Limited National Candidates Limited CENTRAL PROCESSING UNIT Share Plans Pty Limited (Perilya Staff Share Acquisition Plan) Argo investments Limited HSBC Custody Nominees (Australia) Limited Mr Andrew Tsang Neweconomy com au Nominees Pty Limited
% 19. 09 9. 91 six. 59 six. 43 three or more. 38 installment payments on your 77 1 ) 03 0. 88 0. 87 0. 82 52. 77
Demonstrate 9 CBH RESOURCES LIMITED CONSOLIDATED “BALANCE SHEET”, SIMPLIFIED, 2006–2008 (IN COUNTLESS AU$) 2006 Cash & short-term investment Accounts receivable Inventory Different current property Current Possessions Fixed resources Other long-term assets Total Assets Short-term debt Accounts payable Different current debts Current Debts Long-term personal debt Other long-term liabilities Total Liabilities Share & capital surplus Maintained earnings Shareholders’ Equity Total Liabilities & Equity 18 11 six 36 sixty six 30 131 3 of sixteen 6 twenty-five 23 29 78 73 19 fifty four 131 2007 238 28 9 0 275 168 56 501 2 23 10 44 215 56 315 167 20 186
501 2008 a hundred and twenty-five 8 16 9 one hundred and fifty six 283 67 507 a few 45 7 54 201 95 three hundred and fifty 165 9 156 507
–
Resource: Compiled by creators with info from annual reports of CBH.
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9B10N007
Exhibit 12 CBH SOLUTIONS LIMITED CHOSEN DATA BY CONSOLIDATED SALARY STATEMENTS AND CASH FLOW TRANSACTIONS, 2006–2008 (IN MILLIONS OF AU$) 2006 Revenue Profit/(Loss) b/f tax Net Profit/(loss) EPS (in AUD) Net Operating Cash Flow Net Investing Cashflow including: CapEx Net Auto financing Cash Flow eighty-five (22) (15) (0. 02) (14) (25) (24) twenty-four 2007 260 56 39 0. 05 61 (67) (62) 226 2008 159 (41) (29) (0. 03) 11 (153) (154) 29
Note: b/f = ahead of; EPS sama dengan Earnings every share; CapEx = Capital expenditures Source: Compiled by creators with info from total annual reports of CBH.
Display 11 BUSTED HILL’S LEASE CONTRACT BOUNDARIES TO GET CBH RESOURCES LIMITED AND PERILYA LIMITED
Source: Combination of Perilya and CBH Investor display, announced simply by PEM about March 26, 2008 with the Australian Securities Exchange.
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9B10N007
Exhibit doze TIMETABLE OF SIGNIFICANT RELATED EVENTS IN 2008
Particular date 2008-1-30 2008-2-5 2008-3-7 2008-3-26 2008-3-31 2008-6-2 2008-6-14 2008-6-17 2008-6-24 2008-7-16 2008-8-21 2008-10-1 2008-10-2 2008-10-10 2008-10-24 2008-11-12 2008-11-13 2008-11-25
Event SZLN announced cash tender present for Herald PEM announced commencing report on strategy, Tanker appointed business chairman SZLN submitted standard tender present to Herald through String PEM declared merger strategy with CBH CEO of PEM retired Tango elevated bidding cost for Herald SZLN efficiently acquired Panlong Mine Tango increased bidding process price to get Herald again CBH announced new merger proposal, PEM rejected SZLN retreated coming from acquiring Herald, accepted competitor’s tender give PEM released operational resizing plan PEM issued gross annual report pertaining to FY2008 CBH announced the tender present, PEM advised shareholders for taking no action PEM’s board advised shareholders take not any action on CBH’s soft offer PEM announced the cancellation of Mt. O2 sale, equiped Paul executive director CBH released recognized bidder’s declaration China Mining 2008 Meeting held in Beijing on Nov 11~13, PEM’s board rejected CBH’s offer One movie director (appointed in Sep. 2007) and corporate admin of PEM resigned
Origin: Compiled by creators based on press releases and total annual reports of PEM and SZLN.
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9B10N007
Exhibit 13 CASH FLOW FORECASTS OF PEM, 2009 TO 2011
Note Production Expected Zinc Area Price (USD/tonne) Forecasted Zinc Spot Cost (USD/pound) Operating cash costs (USD/pound Zinc) Net Working CF (million USD) CapEx (million USD) Dept Repayment (million USD) Finance Expense (million USD) Net Income Exchange level
1 a couple of 3 some 5
2009 55, 000 1, 250 0. 57 0. sixty five (10. 06) (4. 45) (5. 88) (1. 07) (21. 46) 1 . 5249
2010 fifty five, 000 one particular, 650 0. 75 zero. 65 10. 94 (3. 11) (2. 12) (0. 76) 5. 94 1 ) 5249
2011 55, 1000 2, two hundred 1 . 00 0. 66 42. 19 (5. 90) 0. 00 (0. 68) 35. sixty one 1 . 5249
Note: 1 ) Operating cash costs will be net of taxes. Lead revenues will be netted off in establishing zinc creation cost. 2 . CapEx includes payments intended for mine properties and obligations for PP&E, but excludes payments intended for exploration and evaluation. The business must ensure about 15 mil AUD additional cash next year for the exploration costs. Capex forecasts in million AUD pertaining to year 2009, 2010 and 2011 are 6. 78, 4. seventy four and almost eight. 99 correspondingly. 3. Debt repayment forecasts in million AUD intended for year 2009 and 2010 are 8. 96 and 3. 24 respectively. some. Interest payment forecasts in million AUD for 12 months 2009, 2010 and 2011 are 1 . 63, 1 ) 16 and 1 . 04 respectively. a few. Assume the current assets equal to the current financial obligations (excluding initial debt) over time, thus you cannot find any change of working capital, and “Net cash flow” equates to Equity cost-free cash flow. Take note: CF sama dengan cash flow; CapEx = capital expenditures; PP&E = home, plant, and equipment. Origin: Based on selection interviews with SZLN management as well as the authors’ very own estimates.
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9B10N007
Exhibit 16 CLOSING RATES OF CHOSEN STOCKS AND FOREIGN EXCHANGE RATES, 2006 TO 2008 CBH PEM (note 1 & (note 1) 4) (AUD) (AUD) zero. 14 0. 04 zero. 23 0. 05 0. 30 0. 07 0. 53 zero. 10 zero. 54 0. 14 0. 74 zero. 19 zero. 79 zero. 29 1 ) 07 zero. 36 1 . 05 0. 36 1 ) 65 zero. 40 zero. 41 1 ) 64 2 . 64 zero. 55 installment payments on your 96 zero. 60 3. 89 zero. 56 a few. 99 0. 53 three or more. 85 zero. 54 some. 76 0. 62 4. 37 zero. 54 four. 18 zero. 56 4. 21 0. 59 3. 62 zero. 50 four. 42 zero. 60 five. 19 zero. 61 5. 48 zero. 74 4. 69 zero. 78 5. 35 0. 71 2 . 87 0. 46 3. 08 0. 45 2 . 65 0. 35 2 . 39 zero. 34 2 . 87 zero. 45 installment payments on your 82 zero. 44 2 . 46 0. 40 1 ) 88 zero. 28 installment payments on your 03 0. 28 SZLN (note 1) (RMB) six. 40 six. 46 twelve. 43 twelve. 57 13. 93 13. 02 27. 43 29. 58 35. 86 39. 94 thirty five. 08 44. 44 37. 24 60. 00 64. 00 forty eight. 60 forty. 90 up to 29. 30 23. 35 40. 89 21. 65 twenty four. 79 21. 16 18. 99 seventeen. 70 13. 97 10. 67 12. 38 14. 94 13. 07 16. 17 13. 24 15. 95 8. 70 8. 85 AUD USD Shenzhen ASX200 (note 2) (note 1 & Composite Index (note 2) (note 1) 3) (AUD) (RMB) (RMB/AUD) (RMB/USD) three or more, 743 6th, 659 four. 4821 6th. 8349 some, 018 five, 839 some. 5525 six. 8258 four, 601 7, 559 a few. 4519 6. 8183 five, 136 eight, 004 your five. 9074 6th. 8345 5, 977 9, 470 6. 4551 6th. 8388 5, 215 being unfaithful, 371 6. 5964
6. 8591 5, 655 12, 048 6. 6217 6. 9472 5, 595 13, 505 6. 5256 7. 0002 5, 356 13, 302 6. 4131 7. 0190 5, 572 15, 824 6. 7232 7. 1058 5, 600 15, 858 6. 3954 7. 1853 6, 340 17, 701 6. 4036 7. 3046 6, 533 15, 638 6, 754 19, 531 6, 568 18, 865 6, 247 17, 872 6, a hundred and forty four 15, two hundred 6, 275 12, 546 6. 4607 7. 6155 6, 314 12, 944 6, 166 10, 866 5, 995 8, 549 5, 833 8, 040 5, 773 7, 633 5, 670 6, 647 6. 1599 7. 8087 5, 482 5, 667 5, 384 4, 622 5, 154 4, 327 5, 115 4, 179 4, 986 3, 947 5, 074 4, 302 5. 9196 7. 9956 5, 002 4, 292 5, 259 3, 848 5, 145 3, 516 4, 921 3, 352 4, 930 3, 242
Nov-08 Oct-08 Sep-08 Aug-08 Jul-08 Jun-08 May-08 Apr-08 Mar-08 Feb-08 Jan-08 Dec-07 Nov-07 Oct-07 Sep-07 Aug-07 Jul-07 Jun-07 May-07 Apr-07 Mar-07 Feb-07 Jan-07 Dec-06 Nov-06 Oct-06 Sep-06 Aug-06 Jul-06 Jun-06 May-06 Apr-06 Mar-06 Feb-06 Jan-06
Note: 1 . Rates of stock index are the closing rates of the last trading date of the month, adjusted intended for stock splits and returns. Source: Google! Finance. 2 . Exchange Costs are the month-end official exchange rate of Bank of China. Source: Bank of China site. 3. ASX200 is the Common and Poor’s Australian Investments Exchange 2 hundred Index, which will cover approximately 75 per cent of Australian collateral market capitalization. Source: A.M BEST website. four. At the end of November 08, PEM’s beta was believed to be 2 . 17 (with ASX200 since market collection and 5-year weekly data).
1
