New World Development Co has teamed up with construction materials supplier Companion Building Material (Holdings) to make a $1 billion bid for debt-ridden Siu-Fung Ceramics Holdings.
Siu-Fung - mired in debts of $3.8 billion - is working with creditors to find rescuers to relieve itself of the loan burden.
Douglas Chan Wing-tak, a director of New World Development (China) - New World Development Co's mainland investment arm - said the move was in line with the company's plan to expand its industrial projects in China.
Siu-Fung has 34 joint ventures in China, three of which are equipment plants while the rest manufacture a wide range of ceramic products, from sanitary ware to floor and wall tiles.
New World currently has less than $150 million invested in the ceramics industry in China, including a 12.25 per cent stake of Companion Marble (Holdings) - a subsidiary of Companion Building Material.
New World Development (China) official Tommy Cheng said the acquisition was expected to be finalised by mid-May.