China Best losses fail to deter global investors
Despite mounting losses last year, China Best Group has gained several international investors including Deutsche Bank.
The group's net loss more than doubled to $137 million last year, from $50.47 million in the last nine months of 2004 when it changed its financial year.
The company, which is involved mainly in sea and air freight as well as selling coking coal and trading securities, attributed $100 million of last year's loss to the adoption of new accounting standards which included fair value adjustments on investments, financial instruments and share-based payment expenses, as well as a one-off impairment loss on acquisition goodwill.
In March, China Best raised net proceeds of $51.9 million from a top-up placement of an 8.84 per cent equity interest to investors including Deutsche Bank.
Earlier this year, Asset Managers (China) Fund, a Japanese asset management company, became China Best's second-largest investor by converting US$10 million of the group's bonds it held into 876 million shares.
The firm's turnover jumped to $284.47 million last year from $10.19 million in the last nine months of 2004.
In October last year, the company disposed of its loss-making bio-medical business for $20 million, to focus on expanding its coking operations as its core business.
The firm expected to complete its acquisition of 51 per cent of Shanxi Changxing Yuci Coking for 64.26 million yuan by the middle of this year.
The company is also in negotiations to acquire 51 per cent of Gu Jiao Yi Yi Mei Jiao, another mainland coking firm.
'As China Best is currently in the initial development stage of its coke business, this business's profit contribution is still small,' said chairman Ma Junli.
'However, we believe the coke business will become the company's principal source of profit in the long run,' Ms Ma added.
