Sailun raises 1 billion yuan in IPO
Roughly a month ago Sailun’s corporate headquarters embarked on an initial public offering (IPO) of A shares, which is said to have raised around 1 billion yuan at the stock exchange. 98 million shares have been sold at around US$1 each, meaning the company now has access to three-digit millions for capital expenditure.
The last time the company attempted an IPO was in 2009, but it ended up withdrawing from this process. According to Sailun deputy general manager Mao Qingwen who gave a speech to investors on the eve of the completion of the IPO, the A shares mark “an important milestone in the history” of Sailun. “We believe…you and other investors on the company’s community care and support [moves] to improve corporate governance structure…” The speech suggested that the IPO will support the company’s “core competitive force” as it relies on the capital markets to help it invest in “the constant pursuit of leading technologies.”
IPO funding aimed at R&D and expansion
Company representatives have since confirmed that the funds raised through the IPO will be invested in Sailun’s research and development capabilities and in expanding production capacity. The new shares begin trading on 1 July after which further details of the company’s plans are expected to be released. While it will take time for the positive benefits of the most recent funding injection to filter through, there are already signs that earlier significant investments in research and development are bearing some fruit. By the end of 2010 Sailun had achieved 53 national patents, and participated in the preparation of 41 national and industrial standards.
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