Zhejiang Sanlux Rubber (002224) plans to inject 280 million yuan from the funds raised from a private placement into Zhejiang Sanda Industrial Use Material, in order to obtain a 70 percent interest in the latter, reports yicai.com, citing a company filing.
Following the capital injection, the target company will invest 400 million yuan to build a production facility with annual capacity of 13,500 tons of special rubber materials.
In addition, the company will invest 110 million yuan into a production line with capacity of 30 million Am of special high-performance drive V-belts.
Sanlux Rubber plans to issue a maximum of 58 million shares at not less than 6.78 yuan per share in order to raise up to 390 million yuan.
Sanlux Rubber posted a 27.92 percent year-on-year decrease in 2011 net profit to 44.50 million yuan despite a 21.16 percent increase in revenue to 873 million yuan. Earnings per share hit 0.28 yuan.
The V-belt business, which is a major business for the company, recorded a 21.84 percent year-on-year increase in revenue to 844 million yuan, with gross profit margin of 18.52 percent, down 4.96 percentage points.
 

Source:capitalvue.com