China Shipbuilding Industry Co. (601989), a supplier to the Chinese army, plans to raise as much as 8.48 billion yuan ($1.4 billion) from the sale of shares to acquire assets used to assemble military equipment and fund projects.
The company will offer as many as 2.2 billion shares in a private placement for no less than 3.84 yuan each, it said in a statement to the Shanghai Stock Exchange today. It will purchase assets including some from its parent, according to the statement.
China Rongsheng Heavy Industries Group Holdings Ltd., the country’s largest shipyard outside state control that is seeking government assistance after a slump in vessel orders, is pursuing alternative sources of funding after burning through cash and posting a second straight loss. China announced its support for the industry as a third of its shipyards may shut down in about five years amid a global vessel glut.
China Shipbuilding’s shares will resume trading on the Shanghai exchange tomorrow after being halted since May.
To contact Bloomberg News staff for this story: Daryl Loo in Beijing at email@example.com