Zoomlion Suspends Sanitation Unit Sale After Getting No BidsJasmine Wang
Zoomlion Heavy Industry Science & Technology Co., China’s second-biggest construction equipment maker, suspended the sale of its sanitation business after failing to get any offers for almost a year.
A further announcement on the sale plan will be made later, Zoomlion said in a filing to the Hong Kong stock exchange yesterday, without giving a timeframe. The company got a notice from Hunan Province United Assets and Equity Exchange that there were no offers as of yesterday, it said.
Zoomlion said in March last year it wanted to sell its 80 percent stake in the unit, which makes street sweepers and garbage trucks, as developing the business would divert funds from its construction-equipment operations. The Changsha, Hunan province-based company had extended the deadline for public bids at least five times since then.
Shares of Zoomlion rose 1.4 percent to HK$10.24 at the close in Hong Kong trading yesterday, before the announcement. The stock has slumped 13 percent since Hong Kong’s Ming Pao Daily first reported on Jan. 8 that the company had received an unsigned letter alleging that Zoomlion’s sales are exaggerated. The company has repeatedly denied all allegations.
Environmental and sanitation machinery accounted for 6 percent of the company’s sales in 2011, according to data compiled by Bloomberg. Concrete machinery contributed 46 percent of revenue.
Zoomlion Chairman Zhan Chunxin and other executives would join with Hony Capital Ltd. to bid for the sanitation-unit stake, the equipment-maker said last year. A regulator had told Zoomlion there should be at least five bidders in the auction.