China CNR ditches private placement for rights issue

Updated: 2011-10-10 15:45


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SHANGHAI - China CNR Corp has cancelled plans for a private share placement and will instead issue new shares to raise a much smaller amount, about $1.11 billion, the company said in a statement published on Monday in the Shanghai Securities News.

Under the terms of the rights issue, the railcar maker will sell up to 2.49 billion new shares, issuing 3 shares for every 10 existing shares, the company said.

The company hopes to raise up to 7.1 billion yuan ($1.11 billion) for purposes including research and development, expanding its leasing unit and replenishing working capital.

The amount that it now hopes to raise dropped from 10 billion yuan it originally planned, due in part to a weak stock market, the Shanghai Securities News said in a separate report.

Beijing has said it would suspend new railway project approvals and launch safety checks on existing equipment to address public anger following a crash on a new high-speed rail line in July that killed 40 people.