E-Malt.com News article: China: Yanjing Brewery eyes $207 million share selling to finance expansion

Yanjing Brewery Co Ltd, China's second-biggest beer maker, aims to raise between 1.2 billion yuan ($166 million) and 1.5 billion yuan ($207 million) by selling additional shares to fund expansion, two people familiar with the plan said, according to Reuters, January 21.

A spokeswoman for Beijing-based Yanjing declined to confirm the fund-raising target, but said the share sale plan was under discussion and would be announced towards the end of the week.

Trading in Yanjing shares, which has been suspended since Jan. 18 pending an announcement, would resume next week, she said. The stock had risen 79 percent over the past 12 months.

Guangfa Securities Co has been appointed the underwriter for the new share offer, the market sources, who asked not to be identified, told Reuters.

Chinese brewers are racing to boost their share of the world's largest beer market by volume.

Yanjing's larger rival, Tsingtao Brewery Co, unveiled a plan in November to sell domestic corporate bonds to raise up to 1.5 billion yuan to increase capacity.

"Yanjing needs capital to expand nationwide because of increasing pressure from Tsingtao," said Chen Gang, analyst at Sinolink Securities Co.

Yanjing, which dominates the Beijing market, has 10 percent of China's beer market, much lower than the 16 percent controlled by Tsingtao, a partner of Anheuser-Busch Co Inc, Chen said.

Yanjing said in September it planned to add 13 production lines to help boost sales by a quarter to 5 million tonnes in 2009 from about 4 million tonnes in 2007, taking advantage of China's rising consumption.

Yanjing and several other Chinese breweries recently raised beer prices to offset rising raw material costs.

(US$1=7.242 Yuan)


23 January, 2008