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Sanyuan gets board approval to bid for bankrupt Sanlu
By Jin Jing |
March 4, 2009, Wednesday
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Print Edition
Print Edition
BEIJING Sanyuan Foods Co's proposed bid for bankrupt Sanlu Group Corp has won approval from its board of directors, according to a statement filed to the Shanghai Stock Exchange yesterday.
The approval allowed Sanyuan to sell additional shares to raise 800 million yuan (US$117 million) to 1 billion yuan to bid for the assets of failed dairy maker Sanlu, which was at the center of a milk scandal last year. The scandal led to six infant deaths and made nearly 300,000 children ill with kidney stones.
The auction of Sanlu's remaining assets will be held today by an intermediate court in Shijiazhuang City in Hebei Province where Sanlu is based. The assets included key production facilities as well as a distribution network.
During the board meeting late Monday, Zhang Fuping, chairman of Sanyuan, was confident that its bid would be successful as it is likely to be the only bidder in the auction.
Sanlu was officially declared bankrupt on February 12 after melamine, a banned chemical, was found in its milk powder in September. The dairy maker was forced to stop output, recall products and pay compensation to victims.
Sanlu's production capacity, sales network as well as technologies would help Sanyuan's competitiveness and expand to Hebei and Shandong provinces as well as other crucial markets. The Beijing-based dairy maker has leased production lines in six key plants of Sanlu in December to produce dairy products.
Zhang said 30 percent of Sanlu's annual sales revenue, worth about 1 billion yuan, would be recovered this year if Sanyuan won the bid and Sanlu's assets will start to contribute to its profit next year.
The approval allowed Sanyuan to sell additional shares to raise 800 million yuan (US$117 million) to 1 billion yuan to bid for the assets of failed dairy maker Sanlu, which was at the center of a milk scandal last year. The scandal led to six infant deaths and made nearly 300,000 children ill with kidney stones.
The auction of Sanlu's remaining assets will be held today by an intermediate court in Shijiazhuang City in Hebei Province where Sanlu is based. The assets included key production facilities as well as a distribution network.
During the board meeting late Monday, Zhang Fuping, chairman of Sanyuan, was confident that its bid would be successful as it is likely to be the only bidder in the auction.
Sanlu was officially declared bankrupt on February 12 after melamine, a banned chemical, was found in its milk powder in September. The dairy maker was forced to stop output, recall products and pay compensation to victims.
Sanlu's production capacity, sales network as well as technologies would help Sanyuan's competitiveness and expand to Hebei and Shandong provinces as well as other crucial markets. The Beijing-based dairy maker has leased production lines in six key plants of Sanlu in December to produce dairy products.
Zhang said 30 percent of Sanlu's annual sales revenue, worth about 1 billion yuan, would be recovered this year if Sanyuan won the bid and Sanlu's assets will start to contribute to its profit next year.
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