August 22 -- Zhejiang Zhenyuan (000705) filed it will raise 530 million yuan from a private placement of 41.75 million shares at 12.7 yuan per share, reports Shanghai Securities News. Parent company Shaoxing Tourism Group committed to subscribing 10 percent of the total offering.

All funds to be raised will be invested in upgrading programs of its pharmaceutical subsidiary’s existing capacities, building direct sales stores and a marketing network, and a pharmaceutical logistics center.

The upgrades will cost 300 million yuan in total. After the program is done, pharmaceutical subsidiary’s annual capacities will increase by 30 million bottles of freeze-dried powder, five million syringes, 300 million capsules, and 40 million packs of oral solid preparation. The investment recovery period is estimated at 6.5 years.

Direct sale store construction and the creation of a marketing network will cost 137.49 million yuan in total. The plan is to have more than 100 chain stores and counters.