UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
8-K
Current
Report
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of
earliest event reported): December 23,
2010
Puda
Coal, Inc.
(Exact
name of registrant as specified in its charter)
333-85306
(Commission
File Number)
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Florida
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65-1129912
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(State
or other jurisdiction of
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(I.R.S.
Employer Identification No.)
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incorporation)
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426 Xuefu Street, Taiyuan, Shanxi
Province,
The
People’s Republic of China
(Address
of principal executive offices, with zip code)
011
86 351 228 1302
(Registrant's
telephone number, including area code)
Not
Applicable
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
2.01 Completion of
Acquisition of Disposition of Assets.
On December 23, 2010, Shanxi Puda Coal
Group Co., Ltd. (“Shanxi Coal”), a 90% subsidiary of Puda Coal, Inc. (the
“Company”) satisfied the conditions
precedent and closed a mining right and mining assets transfer agreement dated
October 20, 2010 (the “Xuhutuo Agreement”) with Pinglu County Sanmenzhen Xuhutuo
Coal Mine Ltd. (“Xuhutuo Coal”), pursuant to which Shanxi Coal purchased from
Xuhutuo Coal all its tangible assets and coal mining rights with respect to coal
mining enterprises located in Pinglu County, Shanxi Province. As consideration,
Shanxi Coal agrees to pay Xuhutuo Coal an aggregate purchase price of RMB
125,000,000 (approximately $18.77 million) in cash, of which RMB 20,660,000
(approximately $3.10 million) is for the tangible assets and RMB 104,340,000
(approximately $15.67 million) is for the mining rights of and compensation to
Xuhutuo Coal. A copy of the Xuhutuo Agreement is filed as Exhibit No. 10.1 to
the Company’s Current Report on Form 8-K filed October 25, 2010, and is
incorporated herein in its entirety. The description of the terms and conditions
of the Xuhutuo Agreement described herein is modified and supplemented by such
reference.
Under the Xuhutuo Agreement, Shanxi
Coal paid 50% of the purchase price on October 20, 2010 and 40% of the purchase
price on December 23, 2010 after assets transfer was completed and the mining
permits and property deeds were transferred. Shanxi Coal will pay the remaining
10% of the purchase price six months after the mining permits and property deeds
were transferred.
On December 23, 2010, Shanxi Coal
satisfied the conditions precedent and closed a mining right and mining assets
transfer agreement dated October 20, 2010 (the “Daqi Agreement”) with Pinglu
County Daqi Coal Mine Ltd. (“Daqi Coal”), pursuant to which Shanxi Coal
purchased from Daqi Coal all its tangible assets and coal mining rights with
respect to coal mining enterprises located in Pinglu County, Shanxi Province. As
consideration, Shanxi Coal agrees to pay Daqi Coal an aggregate purchase price
of RMB 66,200,000 (approximately $9.94 million) in cash, of which RMB 8,348,300
(approximately $1.25 million) is for the tangible assets and RMB 57,851,700
(approximately $8.69 million) is for the mining rights of and compensation to
Daqi Coal. A copy of the Daqi Agreement is filed as Exhibit No. 10.2 to the
Company’s Current Report on Form 8-K filed October 25, 2010, and is incorporated
herein in its entirety. The description of the terms and conditions of the Daqi
Agreement described herein is modified and supplemented by such
reference.
Under the Daqi Agreement, Shanxi Coal
paid 50% of the purchase price on October 20, 2010 and 40% of the purchase price
on December 23, 2010 after the assets transfer was completed and the mining
permits and property deeds were transferred. Shanxi Coal will pay the
remaining 10% of the purchase price six months after the mining permits and
property deeds were transferred.
On
December 24, 2010, Shanxi Coal satisfied the conditions precedent and closed a
mining right and mining assets transfer agreement dated October 28, 2010 (the
“Donggou Agreement”) with Pinglu County Donggou Coal Mine (“Donggou Coal”),
pursuant to which Shanxi Coal purchased from Donggou Coal all its tangible
assets and mining coal rights with respect to certain coal mining enterprises
located in Pinglu County, Shanxi Province. As consideration, Shanxi Coal agrees
to Donggou Coal an aggregate purchase price of RMB 77,500,000 (approximately
$11.59 million) in cash, of which RMB 9,130,000 (approximately $1.37 million) is
for the tangible assets and RMB 68,370,000 (approximately $10.22 million) is for
the mining rights of and compensation to Donggou Coal. A copy of the Donggou
Agreement is filed as Exhibit No. 10.1 to the Company’s Current Report on Form
8-K filed November 3, 2010, and is incorporated herein in its entirety. The
description of the terms and conditions of the Donggou Agreement described
herein is modified and supplemented by such reference.
Under the
Donggou Agreement, Shanxi Coal paid 50% of the purchase price to Donggou Coal on
October 28, 2010 and 40% of the purchase price on December 24, 2010 after the
assets transfer was completed and the mining permits and property deeds were
transferred, Shanxi Coal will pay the remaining 10% of the purchase price six
months after the mining permits and property deeds were
transferred.
On
December 24, 2010, Shanxi Coal satisfied the conditions precedent and closed a
mining right and mining assets transfer agreement dated October 28, 2010 (the
“Renling Agreement,” and together with the Donggou Agreement, the Xuhutuo
Agreement and the Daqi Agreement, the “Agreements”) with Shanxi Pinglu Renling
Coal Industry Ltd. (“Renling Coal”), pursuant to which Shanxi Coal purchased
from Renling Coal all its tangible assets and coal mining rights with respect to
certain coal mining enterprises located in Pinglu County, Shanxi Province. As
consideration, Shanxi Coal agrees to pay Renling Coal an aggregate purchase
price of RMB 205,000,000 (approximately $30.65 million) in cash, of which RMB
38,830,000 (approximately $5.80 million) is for the tangible assets and RMB
166,170,000 (approximately $24.85 million) is for the mining rights of and
compensation to Renling Coal. A copy of the Renling Agreement is filed as
Exhibit No. 10.2 to the Company’s Current Report on Form 8-K filed November 3,
2010, and is incorporated herein in its entirety. The description of the terms
and conditions of the Renling Agreement described herein is modified and
supplemented by such reference.
2
Under the
Renling Agreement, Shanxi Coal paid 50% of the purchase price to Renling Coal on
October 28, 2010 and 40% of the purchase price on December 24, 2010 after the
assets transfer was completed and the mining permits and property deeds were
transferred. Shanxi Coal will pay the remaining 10% of the purchase price six
months after the mining permits and property deeds were
transferred.
Xuhutuo Coal, Daqi Coal, Donggou Coal
and Renling Coal have sold their coal mine assets and coal mining rights to
Shanxi Coal as a result of the Chinese government’s requirement to close,
consolidate and restructure smaller coal mines and the government’s approval of
the Company as one of the few coal mine consolidators that has the capacity to
acquire and consolidate such coal mines. Xuhutuo Coal, Daqi Coal, Donggou Coal
and Renling Coal are closing their coal mine operations and are in the
liquidating process. Shanxi Coal merely acquired the tangible assets and coal
mining rights of them in their liquidation process; Shanxi Coal did not acquire
or assume any businesses, customers, vendors, business partners, contracts,
employees or goodwill from the sellers, nor did Shanxi Coal assume any
indebtedness or liabilities from them. Pursuant to the Agreements, Xuhutuo Coal,
Daqi Coal, Donggou Coal and Renling Coal are responsible for canceling or
terminating their respective employment contracts (or employment relationships)
with their staff, paying all unpaid wage, premium and welfare expenses, and
bearing all the expenses caused by the cancellation or termination of the
employment contracts.
As
previously disclosed in the Company’s current report on Form 8-K filed August 5,
2010, on August 1, 2010, Shanxi Coal entered into an investment cooperation
agreement with Ming Zhao, Chairman of the Company’s Board and its principal
stockholder, and Jianping Gao, an individual unrelated to the Company (the
“Investment Cooperation Agreement”). Pursuant to the agreement, the parties will
purchase, consolidate and re-develop six additional coal mines in Pinglu County,
Shanxi Province, including the four coal mines described above. Shanxi
Coal, Mr. Zhao and Mr. Gao will contribute 40%, 30% and 30%, respectively, of
the total investment needed for the project. Shanxi Coal will be the
project manager; in addition, each of Mr. Zhao and Mr. Gao has agreed to
transfer 5.5% of his respective voting rights in the project companies, which
will hold the coal mines after they are acquired, to Shanxi Coal to enable
Shanxi Coal to exercise full operating and management control of the project
companies. The parties will share the profits based upon the above investment
contribution percentages and bear the risks and losses in connection with the
project which will be limited by the amount of investment contributed by each
party. The parties further agree that, once the coal mines to be acquired
and consolidated under the project are operational, to the extent permitted by
the Chinese law, at least 80% of the audited annual net profits of the project
companies established after the coal mine acquisition will be distributed to the
parties at a ratio that is proportionate to their respective investment.
Shanxi Coal is entitled to purchase the equity interest of Mr. Zhao and/or Mr.
Gao in the project companies at Shanxi Coal’s sole discretion at a price
determined by an independent professional appraiser.
A new
project company named Shanxi Pinglu Dajinhe Jinmen Coal Industry Ltd. holds the
assets and mining rights of the Xuhutuo and Daqi coal mines and a new project
company named Shanxi Pinglu Dajinhe Jinyi Coal Industry Ltd. holds the assets
and mining rights of the Renling and Donggou coal mines, all of which are
subject to profit and cost sharing arrangement under the Investment Cooperation
Agreement.
Neither the Company, Shanxi Coal or
their affiliates nor any director, officer or any associate of any such director
or officer thereof has any material relationship with Xuhutuo Coal, Daqi Coal,
Donngou Coal or Renling Coal other than in respect of the
Agreements.
Item
9.01 Financial Statements
and Exhibits.
(d) Exhibits
The
exhibits listed in the following Exhibit Index is filed as part of this
report.
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Exhibit
No.
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Description
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10.1
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Mining
Right and Mining Assets Transfer Agreement, date October 20, 2010, between
Pinglu County Sanmenzhen Xuhutuo Coal Mine Ltd. and Shanxi Puda Coal Group
Co., Ltd., incorporated by reference to Exhibit No. 10.1 to the Company’s
Current Report on Form 8-K filed October 25, 2010
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10.2
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Mining
Right and Mining Assets Transfer Agreement, dated October 20, 2010,
between Pinglu County Daqi Coal Mind Ltd. And Shanxi Puda Coal Group Co.,
Ltd., incorporated by reference to Exhibit 10.2 to the Company’s Current
Report on Form 8-K filed October 25, 2010
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10.3
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Mining
Right and Mining Assets Transfer Agreement, dated October 28, 2010,
between Pinglu County Donggou Coal Mine and Shanxi Puda Coal Group Co.,
Ltd, incorporated by reference to Exhibit No. 10.1 to the Company’s
Current Report on Form 8-K filed November 3, 2010
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10.4
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Mining
Right and Mining Assets Transfer Agreement, dated October 28, 2010,
between Shanxi Pinglu Renling Coal Industry Ltd. and Shanxi Puda Coal
Group Co., Ltd, incorporated by reference to Exhibit No. 10.1 to the
Company’s Current Report on Form 8-K filed November 3,
2010
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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PUDA
COAL, INC.
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Date: December
29, 2010
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By:
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/s/
Qiong Wu
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Qiong
Wu
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Chief
Financial Officer
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