February 7 -- Qinghai Gelatin (000606.SZ) intends to raise up to 350 million yuan by issuing no more than 68 million shares in a private placement at 5.13 yuan per share to Qinghai Siwei Credit Guarantee, Xining Urban Investment Management and Xining Economic Technology Development, reports yicai.com, citing a company filing.

Of the total funds raised, 130 million yuan will be used to acquire Liuzhou Hongsheng Collagen Casing, and 190 million yuan will be injected into the target company.

Hongsheng Collagen Casing will invest a total of 223.23 million yuan to upgrade the technology of its collagen casing production lines, which have annual production capacity of 400 million meters.

Qinghai Gelatin said the acquisition allows it to enter the collagen casing industry, and will open up a new source of revenue.