Shanghai Bright eyes $913m in funds
China's biggest dairy products maker, Shanghai Bright Dairy & Food, aims to raise 975 million yuan (about HK$913.7 million) through a domestic share issue next week.
The company, partly owned by a unit of Hong Kong-listed Shanghai Industrial Holdings, would issue 150 million A shares to domestic investors on Wednesday to raise funds for expansion and new products, it said in a statement in the Shanghai Securities News.
Shanghai Bright is a well-known Shanghai brand for milk, dairy products and fruit juice.
Underwriters had priced the shares at 6.50 yuan each, implying a price-earnings ratio of 20 times the company's earnings last year, the statement said.
Orient Securities was the underwriter for the issue, which will be listed on the Shanghai stock exchange.
The stake held by S.I. Food Products Holdings, the Shanghai Industrial unit, would fall to 30.78 per cent from 40 per cent due to dilution from the issue.
French food giant Danone would hold a 3.85 per cent stake in the company after the issue, down from its original 5 per cent share.
A source close to the company said the issue had been postponed since the fourth quarter of last year but Shanghai Bright officials now felt the time was ripe to tap the market.
Since Shanghai Industrial was listed in Hong Kong, Shanghai Bright chose a domestic issue because it commanded a higher valuation, company officials said.
Shanghai Bright had net profits of 162.9 million yuan last year, up from 104.2 million yuan in 2000, the statement said.
