China's second largest consumer electronics retailer Suning Appliances plans to raise funds worth 2.8 billion yuan through a private placement to expand its network into second-tier cities and strengthen its logistics services, said June 23's China Daily.
The company would issue no more than 200 million new shares to private investors. Suning's chairman Zhang Jindong will purchase shares worth 250 to 350 million yuan, or about 9 to 12 percent of the total.
The company said among the proceeds, 1.4 billion yuan will be used to build and develop 250 new stores in second-tier cities; about 1 billion yuan will be used to finance the setting up of five logistics centers in Chengdu, Wuxi, Xuzhou, Tianjin and Chongqing, and the expansion of the Beijing logistics base. The rest will be used as working capital.
The country's household appliance sector witnessed a slowdown in growth during the last quarter of 2008. Suning's profit fell to610 million yuan during the third quarter of 2008, from 670 million yuan in the second quarter. It was further down to 468 million yuan in the fourth.
However, the company's business is showing signs of recovery. From January to March, the company's profit surged 10.21 percent from a year earlier to 475 million yuan, on sales of 12.66 billion yuan, up 0.16 percent.
The company said it would enter 70 cities and open 200 additional stores this year, up from 850 at the end of 2008.
Source:Xinhua
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