Textiles firm sees profit in asset swap
Jingwei Textile Machinery expects a planned asset swap with its parent will double its annual sales and boost its export market share.
The company proposed two weeks ago to sell four ailing operations to parent China Textile Machinery in return for the injection of a 98 per cent stake in each of the four profit-making cotton-yarn textile-machinery production plants.
Chairman Yin Shouen said the company had already started trial operations at the four plants, although the asset swap was subject to independent shareholders' approval.
'The company's overall bottom lines have greatly improved in the second half compared with the first,' Mr Yin said.
Vice-chairman Liu Shitong said orders had risen substantially in the second half of the year and orders for the first quarter of next year were full. No figures were given.
Mr Liu said the H-share company appointed China Securities, also known as China Huaxia Securities in the mainland, to underwrite its planned A-share issue next month.
The company aimed to issue 180 million A shares at 4.50 yuan (about HK$4.20) to 5.50 yuan each, raising 810 million yuan to 990 million yuan.
Net proceeds would be earmarked for the development of new textile-machinery products and electronic office equipment such as copiers and printers.
Financial controller Yao Yuming said the company had a debt-to-equity ratio of 41 per cent and the level would be lowered to 31 per cent after the asset swap and new share issue.