India Globalization Capital, Inc. : India Globalization Capital (IGC) Completes Acquisition of Ironman
SOURCE: India Globalization Capital, Inc.
02/03/2012| 06:12am US/Eastern
February 2, 2012
IGC completes acquisition of Ironman
? Transaction closed as of December 31, 2011.
? Projected to swing IGC to profitability.
BETHESDA, MD--(Marketwire - February 2, 2012) - India
Globalization Capital, Inc. (NYSE Amex: IGC), a company
competing in the rapidly growing materials and infrastructure
industry in India, announced it has completed the acquisition
of Ironman in China.
The combined companies will be able to leverage expertise in
India and in China to improve operating margins and
profitability. The combined company will also have a
significantly stronger balance sheet to support operations.
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.
Mukunda, IGC's CEO commented, "We are pleased to join with a
great management team in China and build a superior company
focused on materials and infrastructure in two of the fastest
growing economies in the world. We believe that the current
volatility on world markets creates an even greater
opportunity to build this platform at a reasonable valuation.
We encourage our investors to visit our Chinese subsidiary's
web site at www.hfironman.net."
Mukunda added, "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 complimentary 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."
Based in Bethesda, Maryland, India Globalization Capital
(IGC) is a materials and construction company
About Linxi H&F Economic and Trade Co ("PRC Ironman"):
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.
Linxi H&F Economic and Trade Co. ("PRC Ironman") 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 ("HK Ironman"). 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
Some of the statements contained in this press release that
are not historical facts constitute forward- looking
statements under the federal securities laws. Forward-looking
statements can be identified by the use of the words
"may," "will," "should,"
"could," "expects," "plans,"
"proposed," or "continue" or the negative
of those terms. These forward-looking statements are based on
the existing beliefs, assumptions, expectations, estimates,
projections and understandings of the management of IGC
concerning PRC Ironman with respect to future events at the
time these statements are made. These statements are not a
guarantee of future developments and are subject to risks,
uncertainties and other factors, some of which are beyond
IGC's control and are difficult to predict.
Consequently, actual results may differ materially from
information contained in the forward-looking statements as a
result of future changes or developments in our business, our
competitive environment, infrastructure demands, iron ore
availability and governmental, political, economic, legal and
social conditions in China.
Contact Information Investor Relations Contact: Mr.
Factors that could cause actual results to differ, relate to
the (i) ability of IGC to successfully execute on contracts
and business plans, (ii) ability to raise capital and the
structure of such capital including the exercise of warrants,
(iii) exchange rate changes between the U.S. dollar, the
Chinese RMB and the Indian rupee, (iv) weather conditions in
China and India, (v) uncertainties with respect to the
People's Republic of China's legal and regulatory
environment, and (vi) ability of the Company to access
ports on the coasts of India. Readers are cautioned not to
place undue reliance on these forward-looking statements. The
Company undertakes no obligation to publicly update any
forward-looking statements, whether as a result of new
information, future events, or otherwise. Other factors and
risks that could cause or contribute to actual results
differing materially from such forward-looking statements
have been discussed in greater detail in IGC's amended
Annual Report on Form 10-K for the year ended March 31, 2011
and Schedule 14A filed on December 9, 2011 with the
Securities and Exchange Commission.