Shanghai Petrochemical Co has bought a Shanghai-based acrylic fibre plant for 38.8 million yuan (about HK$36.1 million), marking its first ever acquisition.
The move comes after a placement of 400 million new shares, intended to fund the company's expansion, was shelved due to a falling stock price.
Shanghai Petrochemical agreed to acquire the plant from Shanghai Jiushi Co by assuming the plant's long-term debts of 710 million yuan.
Shanghai Jin-Yang Acrylic Fibre Plant, with assets of 850 million yuan, makes acrylic fibres with a design production capacity of 20,000 tonnes a year.
Last year, the plant produced 25,800 tonnes of acrylic fibres, with gross profits of 1.88 million yuan on sales of 520 million yuan.
'As a new initiative in the company's capital expansion plan, the acquisition is expected to increase the company's market share and enhance competitiveness of its products,' the company said.
