General Steel Holdings, Inc. (NYSE:GSI) signed an all-equity share exchange agreement to acquire 84.5% stake in Catalon Chemical Corporation from Lindenburg Ventures Ltd., Anyuan Zhu and Honghui Du for $8.2 million in stock on September 16, 2015. Under the terms of the agreement, existing Catalon shareholders will receive a total equivalent value of approximately $16.9 million or up to a maximum of 13 million shares of General Steel common stock. The 13 million shares will be held in escrow, subject to delivery of minimum sales and net profit targets by Catalon of $46.6 million and $8.4 million, respectively, for calendar year 2016, and $116.1 million and $20.9 million, respectively, for calendar year 2017. In the event the minimum sales and net profit targets are not achieved in a given year, the quantity of payment shares delivered to the Catalon shareholders shall be reduced proportionately, such that the Catalon shareholder shall receive only the percentage of the payment shares equal to the percentage of actual sales and actual net profit achieved in relation to the sales and net profit targets, respectively. Of the 13 million shares, subject to the reductions described above, up to 4.3 million shares are designated to be released following 2016 and up to 8.7 million shares are designated to be released following 2017.

The agreement was approved by the General Steel's Board of Directors. The transaction is subject to customary closing conditions and regulatory approvals and is expected to close on or about September 30, 2015. Stephen D. Brook of Burns & Levinson LLP acted as legal advisor for General Steel Holdings.

General Steel Holdings, Inc. (NYSE:GSI) completed the acquisition of 84.5% stake in Catalon Chemical Corporation from Lindenburg Ventures Ltd., Anyuan Zhu and Honghui Du on October 23, 2015.