China: Yanjing Brewery share sale to raise 1.5-2 billion yuan

Yanjing Brewery Co Ltd, one of China's biggest beer makers, aims to raise between 1.5 billion and 2 billion yuan ($216-287 million) by selling up to 110 million new shares, the official Shanghai Securities News said, according to Reuters, May 22.

The shares would be priced at a minimum of 17.88 yuan, compared with the company's last traded price on the Shenzhen Stock Exchange of 20.20 yuan.

The price has been lowered from the initial plans for a private placement earlier this year. On Jan. 25, the firm said it planned to raise about 1.8 billion yuan by selling as many as 86 million new shares at a minimum price of 20.95 yuan.

The company said at that time that the shares would be placed with as many as 10 investors, including Yanjing's parent company, which would buy at least 50 percent of the offer.

The Shanghai Securities News reported on Thursday that Yanjing said it would use the money to fund investment projects, mainly to expand production capacity around the country.

Yanjing is battling rising raw material costs as it competes with Tsingtao, Carlsberg, Heineken, and China Resources Enterprise Ltd for a slice of the world's largest beer market by volume.

Shares in the firm are down more than 4 percent this year, although that compares with a nearly one-third drop in China's benchmark index.

22 May, 2008