China Shipbuilding to raise $1.4 bln for naval buildup
SHANGHAI, Sept 11
SHANGHAI, Sept 11 (Reuters) - State-owned China Shipbuilding Industry Co Ltd (CSIC) plans to raise around $1.4 billion through a private share sale to buy assets used to build warships, the first time Beijing is tapping the capital market to fund the expansion of its military.
"The deal will expand the financing channels for China's military defense," China Shipbuilding, a key supplier to the People's Liberation Army, said in a statement posted on the Shanghai Stock Exchange website. "It would also herald an overall securitization of China's military assets."
The company plans to raise as much as 8.48 billion yuan ($1.4 billion) by selling up to 2.2 billion shares to as many as 10 selected investors including two sibling companies, Wuchang Shipbuilding and Dalian Shipbuilding, which are key builders of Chinese warships.
It is the first time China is tapping the capital market to fund the buildup of its core military, it said.
China Shipbuilding shares will resume trading on Wednesday after being suspended since May pending announcement of the deal. ($1 = 6.1200 Chinese yuan) (Reporting by Samuel Shen and Kazunori Takada; Editing by Chris Gallagher)