Suning tightens Laox control
By Pan Xiaoyi |
August 17, 2010, Tuesday
|
Print Edition
Print Edition
SUNING Appliance Co said yesterday it plans to invest 2 billion yen (US$23 million) to increase its stake in Japan's Laox to 33.8 percent as it strengthens its control over the Japanese retailer and enhances its capital base.
Suning will subscribe to 21.28 million shares at 95 yen each via a private placement by Laox which plans to issue 26.58 million shares to raise capital. The deal is expected to be completed by mid-September and consolidate Suning's position as the largest shareholder, the Shenzhen-listed firm said in a statement filed to the stock exchange.
The proceeds will be used to open more Laox stores in Japan and replenish capital.
"The investment will further exercise the synergy between the two companies in terms of both management and operations," said Sun Weimin, vice chairman of Suning. "It will also lift profitability and sales of Laox."
The Nanjing-based retailer also plans to appoint another two directors to Laox, which will allow Suning to have four seats on the seven-member board of directors.
Suning became the largest shareholder of Laox a year earlier when it paid 57.3 million yuan (US$8.4 million) for a 27.36 percent stake in the debt-laden firm. Laox, which sells electrical appliances, toys and musical instruments, has turned its losses around and netted a 3.5 billion yen profit in the year ended March 31.
Suning will subscribe to 21.28 million shares at 95 yen each via a private placement by Laox which plans to issue 26.58 million shares to raise capital. The deal is expected to be completed by mid-September and consolidate Suning's position as the largest shareholder, the Shenzhen-listed firm said in a statement filed to the stock exchange.
The proceeds will be used to open more Laox stores in Japan and replenish capital.
"The investment will further exercise the synergy between the two companies in terms of both management and operations," said Sun Weimin, vice chairman of Suning. "It will also lift profitability and sales of Laox."
The Nanjing-based retailer also plans to appoint another two directors to Laox, which will allow Suning to have four seats on the seven-member board of directors.
Suning became the largest shareholder of Laox a year earlier when it paid 57.3 million yuan (US$8.4 million) for a 27.36 percent stake in the debt-laden firm. Laox, which sells electrical appliances, toys and musical instruments, has turned its losses around and netted a 3.5 billion yen profit in the year ended March 31.
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