Telecommunications-equipment maker China Sci-Tech Holdings has announced its second rights issue in four months by proposing to raise $230 million through the sale of rights shares on a one-for-one basis. China Sci-Tech yesterday said it would issue not less than 1.15 billion rights shares at 20 cents each. This represented a 35 per cent discount to the last traded price of 31 cents. The company last launched a two-for-one rights issue in June and raised $61 million. That issue, also priced at 20 cents a share, was completed in late July. China Sci-Tech said the net proceeds of the proposed issue would be $223 million of which $80 million would be used to look for new investment opportunities such as information technology companies or developing a cyber commercial centre with partners. It would use $35 million for loan repayment with the balance for working capital. The company said it had been in talks with a high-technology company to develop a cyber commercial centre in the mainland since the end of last month. It was expected the negotiations would take six to nine months with an initial capital injection of $40 million. China Sci-Tech has been in talks to buy an IT company since late last month but said those negotiations were still under way and they may or may not proceed. Early last month, the company announced an unaudited net loss to $214.41 million in the year to March 31 from $36.96 million the previous year. The figure contained an exceptional loss of $171.02 million.
