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China Union says PTA affiliate halts production

Mon Oct 6, 2008 8:46pm EDT

SHANGHAI, Oct 7 (Reuters) - China Union Holdings 000036.SZ said on Tuesday that an affiliate making purified terephthalic acid (PTA) had halted production and was discussing an asset restructuring.

China

The affiliate, Zhejiang Hualian Sunshine Petro-Chemical Co, is one of China's biggest producers of PTA, a compound used in making polyester. It is 26.4 percent owned by China Union.

China Union said it was asking Hualian Sunshine for information on a report in the official Shanghai Securities News, which said Hualian Sunshine had incurred a large loss trading PTA futures.

The outlook for the asset restructuring is unclear, but it could have a major impact on China Union's earnings this year, the company said without elaborating.

Shares in China Union were suspended on Monday. The company posted a net loss of 53.9 million yuan ($7.9 million) in the first half of this year. ($1 = 6.84 Yuan) (Reporting by Andrew Torchia; editing by Ken Wills)

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