Chinese gas supplier Yingde surges after split board agrees on revised share sale plan
Shares of Yingde Gases Group, one of China’s largest suppliers of industrial gases, surged as much as 7.8 per cent to a 17-month high after its board, embroiled in a bitter row over a proposed share sale to a firm in an unrelated business, agreed to drop the plan and sell shares to investors via an independent selling agent instead.
But the board, which late December received an expression of interest from United States-based rival Air Products to take over Yingde, has not yet passed a proposal by chairman Zhao Xiangti to form an independent board committee to consider the takeover proposal.
“Purely to end any unnecessary speculation which is not in the best interest of the company... the majority board considers it in the best interest of the company to terminate the proposed [shares] placing ,” Yingde said in a filing to Hong Kong’s exchange on Wednesday after two board meetings were held on Tuesday. “The majority board ... has considered that equity financing is still desirable for the company.”
Fund-raising through a shares sale will help Shanghai-based Yingde’s cut debt. Its current liabilities exceeded current assets by 31 per cent as of June 30 and the company had an elevated net debt-to-shareholders’ equity ratio of 121 per cent.
The supplier of gases such as oxygen, hydrogen and nitrogen mainly to steel and chemical producers was forced to refinance a bank loan at double the interest cost earlier this month due to uncertainty over the planned shares sale amid the board row.
