Benzinga | Oct 12, 2021 08:30AM EDT

MingZhu Logistics Enters Non-Binding MOU To Acquire Controlling Interest In Xinjiang Feipeng Logistics

MingZhu Logistics Holdings Ltd. (NASDAQ:YGMZ) (MingZhu or the Company), a leading trucking service provider, today announced that it has entered into a non-binding memorandum of understanding ("MOU") to acquire the controlling interest of Xinjiang Feipeng Logistics Co. Ltd. ("Feipeng"), a services provider of slack coal transportation for the "first and last mile" by road-railway intermodal system in Xinjiang. The acquisition will provide customers an exclusive, crucial link between the first and last mile between slack coal mines and essential railroads. The Company expects the higher efficiency, lower cost intermodal transport services model will set a new standard for future transport. Upon completion, the acquisition will effectively increase MingZhu's capacity by approximately 5 times of its current capacity approximately 1,000 trucks.

Under the MOU, MingZhu will be responsible for the logistics and timely container transport of slack coal linking mines with essential railroad transportation. Feipeng will be responsible for providing transportation services linking road and railway to delivery slack coal and containers. The integration between the two companies will focus on serving Xinjiang's fast-growing rail cargo transportation, as companies work to meet high demand levels related to the reopened global economy.

Completion of the proposed acquisition transaction is subject to further due diligence by the parties and negotiation and execution of definitive documents, including a share exchange or similar agreements, and the determination of a definitive price and other related documentation to complete the transaction. The MOU is non-binding and there is no assurance that the transaction will be completed on the terms described above or at all.

Mr. Yang Jinlong, CEO of MingZhu, said, "We have a strong partner in Feipeng, with the local presence and expertise critical for a successful venture. The combination will increase our capacity by 5X, as we expand well beyond our pre-COVID level. We have spent a lot of time analyzing the transportation and logistics market to uncover growth opportunities that closely align with our business strategy and priorities. This latest collaboration will greatly strengthen our business capabilities in the road-railway intermodal market, and build upon the framework we have already established under our cooperation agreement with Sinotrans Logistics Limited's wholly owned subsidiary, China Merchants Logistics Group Urumqi Limited."

Mr. Jinlong continued, "Legacy cargo transportation networks are typically expansive with disparate systems and greater inefficiencies. We are creating a new faster more efficient, intermodal transportation system to better serve key commerce centers, like Xinjiang, allowing it to facilitate the transfer by road to by rail, as well to as ship coal by containers to improve the transport capacity."

At present, Xinjiang's railway network carries an average of 496,000 tons of freight per day. As of December 31, 2020, Xinjiang's annual railroad cargo shipment volume was 174.8 million tons, reaching a record high with an increase of 15.1% year-on-year. (Source: CCTV.com)