Shanghai B share issue to raise US$17m

SHANGHAI Automation Instrumentation Co will raise US$17.36 million from its new share issue, becoming the last firm in Shanghai to launch a 1993-approved B share offer.

''We expect enterprises from this year's quota to come on the market by June at the earliest,'' said Ni Xinxian, head of Shanghai International Securities' investment banking division. China still uses a quota system to control the issue of shares.

The Shanghai broker is the lead manager and HG Asia is the international co-ordinator.

Seventy million B shares, or 26.84 per cent of the company, will be offered at 24.8 cents. Trading is expected to start on April 29.

Company chairman Zhou Yongqing said yesterday in Shenzhen the proceeds would be used to expand the firm's product range, fund joint-venture projects and introduce new production facilities.

He said the company would require about 300 million yuan (about HK$266 million) for the planned projects. The company had earlier raised 112 million yuan by issuing 32 million A shares. The A shares are listed in Shanghai.

The issue price puts the shares at 11.99 times the forecast 1993 earnings of 18 fen a share on a weighted average basis, and 9.99 times the forecast 1993 earnings of 21.6 fen per share on a fully-diluted basis.

Last year, the company posted after-tax profits of 34.5 million yuan, up from 25.4 million yuan in 1992. In 1991, the firm made a loss of 9.1 million yuan.