Addchance Holdings will list on the main board on October 5 despite the mainland's textile trade tensions with the United States and the European Union, which recently resulted in millions of blocked Chinese sweaters piling up at EU ports. The yarn and sweater producer expects to raise net proceeds of $80 million from its initial public offering, of which $50 million will be used as partial payment for the registered capital of its spinning facilities in Zhangjiagang in the Yangtze River delta region. Addchance is required by Chinese law to fully pay the registered capital of the Zhangjiagang spinning facility by December 12 next year or face cancellation of the facility's business licence. The firm will also use part of the proceeds from the share offer to increase production of knitted sweaters in its mills in Guangdong province to 900,000 pieces per month from 700,000, even though sweaters are one of the 10 Chinese textile items restricted for export to the EU until the end of 2007. From June until this month, millions of Chinese sweaters were blocked at EU ports because they exceeded EU quotas. They were released only after a Sino-EU agreement on September 5. All of Addchance's products are exported, 75 per cent to the EU and the rest to the US. The firm subcontracted more than 95 per cent of its sweater production to Cambodia and thus managed to avoid EU and US quotas on Chinese textiles, managing director Martin Wong Chiu-hong said. This was a good time to list, founding chairman Sung Chung-kwun said, adding: 'With the Sino-EU agreement of September 5, the sweater problem was solved. Sino-US textile trade tensions will probably be solved soon.' Representatives from the two countries will meet for talks in Washington on Monday and Tuesday. The US maintains import quotas on 10 Chinese textile categories, but the quotas may be replaced by a comprehensive agreement if next week's Sino-US talks succeed. Despite the trade tensions, Mr Sung was optimistic. 'The flourishing Chinese economy is well poised to become the world factory for textile and garment products,' he said. Addchance is offering 100 million shares at $1.01 per share, of which 90 per cent will be placed and 10 per cent offered to the public. The shares offered represent 25 per cent of the company's enlarged issued share capital. The company's turnover was $670.7 million in 2002, $609.3 million in 2003 and $772.2 million last year while its net profit was $29.57 million, $31.19 million and $47.75 million respectively.