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Huaxin Cement plans 4b yuan private share placement

By Zheng Lifei (chinadaily.com.cn)
Updated: 2009-03-16 17:15

Huaxin Cement Co, in which Swiss cement maker Holcim holds a 39.88 percent stake, said it plans to raise up to 4 billion yuan ($585 million) through a private share placement to fund its production expansion projects.

The Shanghai-listed cement maker said over the weekend that it will issue no more than 200 million new shares to as many as 10 of its existing shareholders.

The minimum price of the new shares will be 20.73 yuan, the company said in a stock exchange filing.

Holcim, the world's second-biggest cement maker and Huaxin's largest shareholder, will have priority to subscribe the new shares but will not change its status as the leading shareholder, Huaxin said.

The capital raised will be used to fund the construction of 11 new clinker plants spread across six provinces, which will increase its annual production capacity by 15.94 million tons of cement and 13.08 million tons of clinker, the Hubei-based cement maker said.

The share placement is still subject to shareholder approval.

Huaxin aims to sell 33.59 million tons of cement this year, up from last year’s 27.88 million tons, while sales revenue is expected to increase 40 percent from the previous year’s 6.34 billion yuan, the company said.

Huaxin Cement said last week its net profits in 2008 surged 58 percent to 460 million yuan, boosted by increased sales.

Huaxin's shares declined 1.58 percent to close at 22.38 yuan on Monday in Shanghai trading.