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IGC Completes Acquisition of Ironman
Posted February 2, 2012
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BETHESDA, MD -- India Globalization Capital, Inc. (NYSE Amex:IGC) has completed the acquisition of Ironman in China.
For the financial year ended (FYE) March 31, 2011, Ironman sold high-grade iron ore (65-66% Fe content) generating revenue of $13.5 million with an operating income of $8.0 million and a net income of $5.67 million. Ironman's balance sheet had, as of FYE March 31, 2011, Total Assets of about $15.2 million and total liabilities of about $8.2 million and stockholders' equity of about $6.9 million. We expect to combine the financial statements as of December 31, 2011.
PRC Ironman operates a beneficiation plant on a site with approximately 2.2 square kilometers of iron ore deposits. The initial studies project more than 3 million metric tons of ore deposits on this site. At current prices, the projected value of the reserves is approximately $350 million. The plant takes low-grade iron ore and through a dry and wet separation process extracts high-grade iron ore. Our strategy will be to ship low-grade iron ore from India to the plant and process the ore into high-grade ore, which can then be sold to customers in China. China is the world's largest iron ore importer. The market for Chinese steel includes Japan and other Asian countries such as India.
Ram Mukunda, IGC's CEO, commented, "In the short term, our strategy is focused on three goals: First, this acquisition will be the catalyst that returns IGC to profitability in the next fiscal year beginning in March 2012. Second, the acquisition positions us to boost capacity organically and through further acquisitions of complementary iron ore mining and processing operations. Third, we see a good opportunity to leverage Ironman's beneficiation plant to facilitate the export of low-grade iron ore out of India into China where the ore can be beneficiated into higher-grade ore for sale to Chinese customers. We believe that the synergies will potentially add significant incremental revenue and profit for the coming fiscal year and drive IGC to profitability."
About IGC:
Based in Bethesda, Maryland, India Globalization Capital (IGC) is a materials and construction company operating in India. We supply iron ore to China and rock aggregate to the infrastructure industry in India. For more information about IGC, please visit IGC's Web site at www.indiaglobalcap.com.
About Linxi H&F Economic and Trade Co ("PRC Ironman"):
Linxi H&F Economic and Trade Co. is based in the People's Republic of China (PRC) and is a foreign equity joint venture ("EJV"). It is 95% owned subsidiary by Hong Kong based H&F Ironman Limited. PRC Ironman operates a beneficiation plant, which extracts high-grade iron ore from the iron ore rich sand. For more information on PRC Ironman, including a video on the beneficiation process, please visit the Web site at www.hfironman.net.
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India Globalization Capital, Inc.
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