26.03.2007

Zhenhua plans expansion

Shanghai-based Zhenhua Port Machinery Co. - which claims to be the world's largest maker of container cranes - plans to sell as many as 200 million new shares as part of plans to raise 3.5 billion yuan (£230 million) to fund expansion.

The company said that the sale price will not be lower than the stock's average in the 20 trading days prior to the issue of the share prospectus, in a statement to the Shanghai stock exchange. Shareholders will vote on the plan at an April 10 meeting.

Zhenhua, claims 74 percent of the global market for container cranes and is expanding its production base as ports enlarge their capacity for handling freight.
Last month the company said it won an order to supply $200 million of cranes to Hanjin Shipping Co., South Korea's largest shipping line.

3.3 billion yuan will be used to fund four expansion projects,with the remaining 200 million yuan for working capital. The company may borrow from banks if the share sale doesn't raise enough to fund the plans, it said.

Company President Guan Tongxian in October said Zhenhua's sales may rise as much as 30 percent this year after jumping 50 percent to $2 billion in 2006. The company is scheduled to report 2006 earnings on March 20.

Shares of Zhenhua rose by their 10 percent daily limit to 15.60 yuan yesterday. The stock has advanced 33 percent this year, more than three times the average.