Jiangxi Hongdu proposes 70-mln-share private placement

Jiangxi Hongdu Aviation Industry Co.<600316> announced yesterday that it is planning a private placement to sell a maximum of 70 million shares to more than ten institutional investors at the price of no less than RMB 35.75 per share.

Hongdu's controlling shareholder AviChina Industry & Technology Co will pay RMB 250 million in cash to strengthen its shareholding in the company, while Hongdu Aviation Industry Group will use its aircraft-related assets worth of RMB 350 million for the acquisition. Upon the completion of the placement, the total shares held by the two companies will be more than 50% of the Hongdu's outstanding shares.

AviChina Industry & Technology Co., the Chinese maker of cars and helicopters, suspended its Hong Kong traded shares for the private placement.

Hongdu's shares soared 10% to close at RMB 42.01 yesterday, which is also the first day for trading after a nearly two-month suspension.

Jiangxi Hongdu Aviation Industry Co. is China's first high-tech foreign-oriented enterprise with its main business in exporting the whole set of aircraft. Its major business assets are developing, producing and selling trainers and general aircraft spare parts.