Thursday 2011-08-25  16:49 Publisher: CapitalVue
August 25 -- Qinghai Gelatin (000606.SZ) intends to raise up to 380 million yuan by issuing 60 million shares in a private placement at a minimum price of 7.36 yuan per share, reports the National Business Daily, citing a company filing.

In its previous plan, Qinghai Gelatin’s target was to raise up to 400 million yuan at a minimum price of 8.84 yuan per share. The company revised the plan after investors expressed their disapproval of it.

Of the 380 million yuan in raised funds, 158 million yuan will be used to acquire a 100-percent stake in Liuzhou Hongseng Collagen Casing, while 190 million yuan will be used to build a collagen casing production line with annual production capacity of 400 meters.

Hongseng Collagen Casing posted losses of two million yuan in 2010 and net profit of 3.64 million yuan in the first half of 2011.

Since Hongseng Collagen Casing has net assets of 46.82 million yuan, the 158 million yuan acquisition price recorded a value-added rate of 237 percent.

In 2010, Mercury Venture Capital injected 18.46 million yuan into Hongseng Collagen Casing, accounting for 33.27 percent of the company’s total share capital. If the current acquisition is completed successfully, Mercury Venture capital will receive 52.57 million yuan, recording an investment income rate of 180 percent.