Stock sale to propel landmark aircraft - ResearchInChina
Date:2007-07-17
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XI'AN Aircraft International Corp (stock code: 000768) plans to raise at least six billion yuan (US$770 million) selling new shares to its parent and other investors to help finance development of China's first domestically produced commercial aircraft.
The company, the country's second-largest listed aerospace firm by revenue, will sell 660 million shares at nine yuan or more each on the Shenzhen Stock Exchange. At least 55 percent of the shares will be bought by its parent, Xi'an Aircraft Industry (Group) Co, which has agreed to pay 9.18 yuan a share, it said in a statement to the stock exchange yesterday.
The sale will more than double the number of outstanding shares. The company currently has 626 million shares, 43 percent of which are held by its parent.
Proceeds from the share sale will help fund development of the Advanced Regional Jet 21, or ARJ21, a small feeder plane that will seat up to 90 passengers. As China's first domestically designed and manufactured commercial aircraft, the plane's main body was completed in Shanghai in late June and is due to make its first test flight in March next year.
The jet is the first step in the nation's program to build a 150-passenger airliner to compete with Boeing Co and Airbus SAS for a share of the US$2.8 trillion in international airplane orders over the next 20 years.
The company, based in central China's Shaanxi Province, will receive 3.4 billion yuan in assets from its parent in exchange, including plants for making ARJ21 parts. The company currently makes parts for Boeing and Airbus, including tail fins for 737-700s and wing parts for Airbus A320s.
The asset transfer will boost the company's net income this year by about fivefold from last year, while sales will triple, it said yesterday. The company posted a net profit of 63 million yuan on sales of 1.78 billion yuan in 2006.
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