News: Lamboo Resources, Hengda Graphite Co will no longer merge

Lamboo Resources (ASX:LMB) has resumed trading after updating the market that the proposed merger with Hengda Graphite Co, Ltd will not go ahead.

In afternoon trade, Lamboo last changed hands at $0.185, a 44% decline on the day.

Lamboo said it could not determine that the principal owner of the equity of Hengda actually fully owned what he had contracted to sell to LMB and as a result, LMB sought suspension of trading in its shares, and added:

"LMB has spent the past few weeks seeking clarification of the position with Hengda and its banks and other lenders.

"LMB understands that with the support of the provincial banks, Hengda has received extended capital terms.

"The supply arrangement with LMB remains critical to Hengda’s business and remains intact."


Key points

- Hengda merger unable to be completed as Hengda equity ownership materially different and undisclosed details of further loan terms discovered, significantly altering the benefits of a merger;

- Hengda being re structured with extended facilities and remains a key flake processor;

- LMB's is in advanced discussions to secure repayment of the deposit and possibly its costs; and

- Joint venture proposal under consideration with key high technology flake graphite anode producer.