Chinese electronics retailer Suning has published a report, which states that it will issue up to 200 million new non-public shares at a price of at least CNY15 per share to raise CNY2.8 billion for eight new projects.
Of the total, shares valued at CNY250 million to CNY350 million will be acquired by Zhang Jindong, chairman of Suning and these shares will not be traded in the market or transferred for at least 36 months following the completion of the share issue.
According to Suning, the capital raised will be invested in eight projects of three major kinds, totaling CNY3.315 billion. In particular the company will use CNY1.4 billion to develop 250 chain stores across China, increasing its chain store area by 979,800 square meters; it will use CNY1.01 billion to set up new distribution centers in Chengdu, Wuxi, Chongqing, Tianjin, Xuzhou, and Beijing; and it will add CNY390 million to its liquidity.
Published statistics show that Suning is one of the largest home appliances and consumer electronics retailers in China. By March 31, 2009, the company had opened 819 chain stores in 181 Chinese cities at prefecture-level or above with a total store area of about 3.525 million square meters. During the first quarter of 2009, the company made revenues of CNY12.658 billion and realized a net profit of CNY475 million.