Jiangxi Wannianqing Cement intends to raise CNY692m (US$105m) by issuing 65 million shares at CNY10.64/share, according to a company filing. Of the total money raised, CNY500m will be used to supplement its working capital and acquire a 50-percent stake in Jinxi Cement.
The remaining funds will go to a thermal power project and the construction of two cement mixers.
Since Nanfang Wannianqing Cement, Jiangxi Wannianqing Cement’s subsidiary, also holds a 50 per cent stake in Jinxi Cement, Jiangxi Wannianqing will be entitled to 75 per cent of Jinxi Cement’s net profit after the acquisition.
Jinxi Cement posted a net profit of CNY29.97m in 2009 and CNY25.81m for the first nine months of 2010.