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BOE sells shares to fund LCD production

BOE Technology Group Co has sold shares worth 12 billion yuan (US$1.76 billion) to raise money which will be used to build a liquid crystal display panel production line, the most advanced on the Chinese mainland, the Shenzhen-listed firm said yesterday.

Beijing-based BOE, the biggest LCD panel maker on the Chinese mainland, sold 5 billion shares at 2.40 yuan each to 10 investors, including Haitong Securities Co, Southwest Securities Co and Xiamen Hengxing Industrial Co's Chairman Ke Xiping, it said in a statement to the Shenzhen Stock Exchange.

The sale was the biggest private placement in the domestic market for about 18 months, according to Bloomberg News. China COSCO Holdings Co raised 12.97 billion yuan from its placement in December 2007.

"It will fund us to build the advanced LCD line and leverage the company's debt," BOE said in the statement.

BOE surged by the 10-percent daily cap to close at 5.05 yuan yesterday while the Shenzhen stock index gained 1.21 percent.

BOE, which had a net loss of 807.5 million yuan last year, announced last month it would invest 17.5 billion yuan to build a sixth-generation LCD panel production line to make LCD panels for computer monitors and LCD TVs of up to 37-inch screen.

The domestic LCD panel makers, including Shanghai SVA and BOE, were previously only able to make small-sized LCD panels for computers. Chinese TV makers have to import large LCD panels from overseas makers like Samsung and Sharp.

"China has to have its own advanced LCD production plant, otherwise the LCD TV industry will be controlled by overseas firms," said Zhang Bing, analyst at DisplaySearch, a United States-based consulting firm.



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