Shougang seeks to raise $40m
Shougang Concord Century Holdings, which manufactures steel products, plans to place new shares to fund its buyout of Jiaxing Eastern Steel Cord, according to a source close to the deal.
Shougang Concord is believed to be raising as much as $40.8 million in a placement of 50 million to 60 million new shares at 68 cents each.
The price is at a 6.84 per cent discount to Shougang Concord's last traded price of 73 cents on Wednesday.
Trading in Shougang Concord shares was suspended yesterday pending the release of price-sensitive information, according to the company's notice filed with Hong Kong Exchanges and Clearing.
Shougang Concord would use proceeds from the placement to buy shares in Zhejiang-based Jiaxing Eastern it did not already own, the source said.
The 28.2 per cent stake belongs to Hong Kong-listed Everbest Century Holdings. Trading in Everbest was also suspended yesterday.
Citic Capital was said to be the placing agent. But Citic declined comment and officials from Shougang Concord could not be reached yesterday.
Shougang Concord last month said it had planned to raise funds for the expansion of Jiaxing Eastern and the acquisition of the company from Everbest.
