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Firm seeks funds to expand production

CHINA Yurun Food Group Ltd, a Chinese frozen-meat processor, said yesterday it planned to raise HK$1.72 billion (US$222 million) in a share sale to expand production.

China Yurun is expected to sell 130 million new shares at HK$13.23 each to Willie Holdings Ltd, after the controlling shareholder sold 200 million existing shares at the same price to third parties, according to its statement to the Hong Kong Stock Exchange yesterday.

The share sale is seen to net around HK$1.67 billion, the Nanjing-based firm said.

The issue price represents a discount of 7.48 percent to Yurun's last closing price of HK$14.30 each on Thursday.

The new shares will account for 8.45 percent of the company's existing issued share capital and around 7.79 percent of its enlarged capital. After the deal, the stake by the controlling shareholder in the company will be trimmed to 36.23 percent from the previous 43.83 percent.

China Yurun said it is tapping current market conditions to increase capital. The money raised from the share sale will be used to expand production, it said, without giving details.

Zhu Yicai, its chairman, earlier said the company planned to invest HK$1.5 billion this year to lift its slaughter capacity to 25 million units.

Shares of China Yurun shed 12 percent to HK$12.58.


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