Guanghui Industry to raise money for new energy arm

Xinjiang Guanghui Industry Co. Ltd. announced that it would issue renminbi-denominated A shares in a private placement to its controlling shareholder Xinjiang Guanghui Industry Investment (Group) Co. and other investors. It will place 100 million to 300 million shares to 10 selected investors, including Guanghui Industry Investment (Group), at a price of not less than RMB11.47 (US$1.68) per piece. All the investors will subscribe for the new shares in cash and the controlling shareholder plans to subscribe for not less than 10% of the total. Guanghui Industry plans to raise not more than RMB2.5 billion (US$366 million) from the issuance and inject the proceedings into Xinjiang Guanghui New Energy Co. Ltd. The big money is expected to be used to a coal-based project with a yearly capacity of 1.2 million tons of methanol and 800,000 tons of dimethyl ether (DME). The project needs a total investment of roughly RMB6.46 billion (US$945.7 million) and Guanghui Industry will also pump some money that it collects on its own so as to raise its total injection to the figure. Notably, Guanghui New Energy has bet heavily on its coal chemicals business after gaining the right to exploit some coalmines in the northwestern region of Xinjiang in mid-2008. (March 25, 2009)