Dongfang bids to buy sister firms

PUBLISHED : Saturday, 03 February, 2007, 12:00am
UPDATED : Saturday, 03 February, 2007, 12:00am

Hong Kong and Shanghai-listed Dongfang Electrical Machinery last night said it wanted to buy the controlling interest of sister company Shanghai-listed Dongfang Boiler and the entire Dongfang Turbine company for 11.9 billion yuan in cash and shares.

Dongfang Electrical Machinery, one of the mainland's three largest power-plant equipment producers, hopes to buy the two companies from parent Dongfang Electric Group following a state share reform of Dongfang Boiler, according to a statement last night.

The company plans to issue 367 million A shares at 24.17 yuan each and settle the remainder in cash.

The deal, which will enable Dongfang Electrical Machinery to own 68.05 per cent of Dongfang Boiler, will be subject to approval of the independent shareholders of Dongfang Electrical Machinery and Dongfang Boiler.

Dongfang Electrical Machinery said due diligence on the two takeover companies was under way.

The company's H shares, which have been suspended from trading since December 20 and last traded at HK$20.80, will resume trading on Monday.

Dongfang Electrical Machinery has said third-quarter net profit might jump 150 to 180 per cent and nine-month earnings might rise 70 to 80 per cent, based on Chinese accounting standards.

Its first-half net profit surged 44.08 per cent year on year to 382.15 million yuan on turnover 71.1 per cent higher at 2.01 billion yuan.