Guangzhou Shipyard International Co. (317), a unit of the nation’s biggest shipbuilder, plans to sell as much as 2.5 billion yuan ($407 million) of new shares to its parent and other investors, in part to finance an acquisition.
The company will use as much as 1 billion yuan from the placement to buy CSSC Guangzhou Longxue Shipbuilding Co. from controlling shareholder China State Shipbuilding Corp. and its partners, according to a Hong Kong stock exchange filing yesterday evening. Guangzhou Shipyard said it will use the balance of the proceeds for working capital.
Longxue is the largest builder of “modern” large ore, bulk and oil vessels in southern China, with annual capacity of 3.5 million deadweight tons, Guangzhou Shipyard said. The Baltic Dry Index, a gauge of costs to transport minerals and grains by sea, had its biggest advance since October last week.
China State will buy at least 2 billion yuan of Guangzhou shipyard’s new shares, according to yesterday’s filing. The company’s shares will resume trading in Hong Kong today, ending a suspension that started on May 13.
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