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Machine tool manufacturer sells 30% stake

(Xinhua)
Updated: 2007-06-10 09:38

China's largest machine tool manufacturer, the Shenyang Machine Tool Group Ltd., Saturday sold 30 percent of its equities to the U.S. Cornerstone Financial Company in a move to sharpen the company's competitive edge.

"The share holding reform will preserve and increase the value of State-owned assets," said Liu Yongsheng, head of Shenyang's State-owned Assets Supervision and Administration Commission, owner of the Chinese company.

Liu said the deal was made in accordance with requirements of the Shanghai United Assets and Equity Exchange, on which the company made 49 percent of its company available for sale to both domestic and foreign buyers last November.

"We are looking for strategic investors to buy the remaining 19 percent," said Liu.

It is not disclosed how much will be raised from the sale of almost half of the company which has assets of more than 8.6 billion yuan (1.1 billion U.S. dollars) and where the revenue from the sale will go.

Sources close to the commission had said the  company, in principle, requires at least three investors that are independent of each other and do not share common equity controllers.

No single investor is permitted to buy more than 30 percent of the company's stake, and the ceiling for foreign share holders is also set at 30 percent, the sources added.

None of the investors, either from China or overseas, are allowed to transfer their shares within five years of purchase, according to the sources.

"We have won a bid to buy the equities," said Rose-Marie Fox, CEO of the U.S. company, adding that she hoped her company help give the Chinese company a leading position in the international market.