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Sichuan Hongda cancels 2 bln yuan share placement

Thu Oct 16, 2008 8:52pm EDT

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SHANGHAI, Oct 17 (Reuters) - Sichuan Hongda Co (600331.SS), a maker of zinc oxide and other chemicals, said on Friday that it had cancelled a 2 billion yuan ($295 million) share placement because of poor market conditions.

The company had announced in April that it planned to place up to 30 million new shares with its parent group in exchange for a 9 percent stake in a zinc-producing enterprise in the southwest Chinese province of Yunnan.

But Sichuan Hongda said on Friday that damage it suffered during a devastating earthquake in May, and then a steep slide of China's stock market, had caused it to cancel the plan.

The company's stock price has tumbled from 32.48 yuan in late April to 4.89 yuan at the close on Thursday this week. ($1 = 6.82 yuan) (Reporting by Andrew Torchia; editing by Ken Wills)



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