Appliance firm plans 2.8b yuan private placement

Suning Appliances, China's second largest consumer electronics retailer, said it plans to raise funds worth 2.8 billion yuan through a private placement, in a bid to expand its network into second-tier cities and strengthen its logistics services.

The company said it would issue no more than 200 million new shares to private investors. Zhang Jindong, Suning's chairman, will purchase shares worth 250 to 350 million yuan, or about 9 to 12 percent of the total.

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 injected into setting up five logistics centers in Chengdu, Wuxi, Xuzhou, Tianjin and Chongqing, and into extending the Beijing logistics base. The rest will be used as working capital, according to the corporate announcement.