Siu-Fung Ceramics' purchase of three German companies appears to have gone badly awry with the group reporting a half-year loss of $252 million and announcing it will tap shareholders for $392 million in cash through a five-for-two rights issue. The group also said it was cancelling plans to list its troublesome German unit in the United States. Siu-Fung reported a $252.19 million attributable loss in the six months to June compared with a profit of $102.71 million in the corresponding period a year earlier. Turnover shrank 1.38 per cent to $553.7 million while losses per share were 18 cents compared with 7.7 cents last year. No interim dividend was declared. The group acquired the three German companies - Netzsch, Heimsoth and Dubois - in the past three years in a bid to boost expansion and upgrade its technology. The companies were rolled into one subsidiary called NHD. The pre-tax loss included a $133.8 million exceptional item incurred as a result of a $85 million operating loss by NHD subsidiary Selb, which was closed down. A $14 million provision stemmed from the reorganisation of the NHD unit and a $34.8 million provision for bad debts was inherited from Netzsch's previous customers. Chairman Siegfried Lee Siu-fung said the closure of Selb early this month was part of the NHD reorganisation decided prior to the acquisition and was in no way related to the failure of the spin-off. Mr Lee said Selb cost Siu-Fung $55 million for the six months from April to September. He said the company would save $25 million a month after the closure. The rights issue is being priced at 70 cents a share, representing a 5.4 per cent discount to yesterday's closing price of 74 cents. Mr Lee denied the cash call was the last resort for Siu-Fung to generate capital after the failure of the NHD spin-off and other financing possibilities. Newly appointed chief executive officer and managing director Y.T. Du said the proceeds from the rights issue would be used to repay bank loans that were used to finance the acquisition of Netzsch Holding & Co in March this year which was later merged into the NHD unit. Mr Lee said he had agreed to purchase all the rights shares not purchased by other shareholders. Mr Lee said the rights issue allowed him to have an equal opportunity to participate in Siu-Fung's future development.