Sapphire Corp Target price 60 cents, last traded 12.9 cents

Dear James,
We don't talk about VTM la. This is a clear case of minority shareholder with no say in business.
The report says;
".....Weiyuan will sell exclusively to Special Steel sufficient steel billets of the necessary qualities to allow the latter to make 600,000 tons of ‘high quality variety’ hot-rolled steel per year. Longwei will purchase exclusively from Special Steel all of its hot-rolled steel needs and raise its capacity to 250,000 tons of steel, inclusive of 100,000 tons of silicon steel. Silicon steel requires both hot-rolled and cold-rolled steel as raw materials...."
Sapphire has 12.4% of Weiyuan and 100% of Special Steel. The customer of these 2 companies is Longwei, the company held by the same owner of Weiyuan. Who has more bargaining power, customer or supplier?
 
Weiyuan obviously has no money to repay the USD 40m loan to Sapphire. That is why it is selling the shares of Longwei to Sapphire.
 
The deadline set is April 2012.
Let's wait to see what happens then before we comment further.
Buyers beware.
 

Dear Jameskuwe,
It means SMRPL has no money to repay Sapphire and instead of repaying the money, offered 3.55 million shares to Sapphire.
This has increased the paid up capital of SMRPL.
[hr]
[jameskuwe 24-01-2012]:
But there was an announcement that i don't fully understand. can anyone care to explain? Does it mean that SMRPL has paid $15 to $19M to Sapphire? The Board of Directors of Sapphire Corporation Limited (the “Company”) wishes to announce that Sapphire Mineral Resources Pte Ltd (“SMRPL”), a wholly-owned subsidiary of the Company, has increased its issued and paid up capital from S$15,818,670 to S$19,368,456 by an allotment of 3,549,786 ordinary shares at S$1 per share to the Company in consideration of the capitalization of the amount owing by SMRPL to the Company. The transaction is not expected to have any material impact on the net earnings per share or net tangible assets per share of the Company for the financial year ended 31 December 2011. None of the directors or substantial shareholders of the Company has any interest, direct or indirect, in the aforesaid transactions save their shareholdings in the Company. BY ORDER OF THE BOARD Teo Cheng Kwee Chief Executive Officer Date: 13 January 2012

Thanks Macgyver for the info. Now I understand the comapny better. It has a complicated company structure. Sapphire aims to be China third largest steel producing company by 2013. That is why it is slowing buying out its subsidaries. It has been giving loans and when those borrowers cant pay up, Sapphire receives their shares. Let's hope those shares are worth their wieght in gold. I am hoping their production of sikicon steel will yield profits in 2012. This is the latest insight into Sapphire's future______________________________________________________In line with our business philosophy to pursue a multi-faceted business growth strategy, the Group has been actively seeking other business opportunities that offer expansion potential into premium steel products. Silicon steel, high-grade hot rolled coils ("HRC") and cold rolled coils ("CRC") are sought-after products which the Group has identified as future growth drivers to further supplement vanadium's contribution. In China, silicon steel, especially grain-oriented silicon steel, enjoys growing market demand because of its wide-ranging applications in a vast array of electrical equipment including transformer cores, power reactors, generator cores, and electrical motors, hermetic motors for refrigerators and freezers. In a nutshell, silicon steel is vital in powering up the electricity industry whose growth has been spurred by China's economic progress. The R&D, production and sale of premium steel (including silicon steel) will be a key project which the Group, through Special Steel, will undertake in collaboration with Weiyuan, Chuanwei Group and Longwei. The Group believes that expanding into the premium steel business is a synergistic and positive initiative. The acquisition of the remaining 30% equity interest in Special Steel has been approved by the shareholders of the Company at an extraordinary general meeting on 3 October 2011. The increased profit contribution from Special Steel will have a positive impact on the results of the Group. However, in view of the continued uncertainties of the global economic and financial outlook, the Group expects to operate under challenging conditions.