Hubei Xingfa Chemicals Group (600141), a maker of chemicals such as phosphate and dimethyl sulfoxide, plans to issue up to 69.91 million shares at not less than 19.31 yuan per share in order to raise a maximum of 1.35 billion yuan to acquire a 49 percent interest in Yidou Xingfa, and for expansion projects, reports Shanghai Securities News, citing a company filing.

Of the total, 271 million yuan will be used for the acquisition of Yidu Xingfa, in which the listed company currently has a 51 percent interest.

The remaining funds raised will be used to build a wet process phosphoric acid production facility with annual capacity of 100,000 tons, an ore dressing facility with capacity of two million tons a year, and to boost working capital.

Yichang Xingfa Group, the largest shareholder of the company, gave a commitment to subscribe to at least five percent of the private placement.

Through the end of 2011, the target company's net assets were valued at 553 million yuan.

Following the acquisition, the listed company will invest 578 million yuan in a wet process phosphoric acid purification facility in Yidu in order to reduce the company's reliance on the use of yellow phosphorus in the production of phosphorus.