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Sichuan Chengfei to buy AVIC's military assets for $2.5 bln
May 19, 2014 / 4:21 AM / 4 years ago

Sichuan Chengfei to buy AVIC's military assets for $2.5 bln

BEIJING, May 19 (Reuters) - Auto parts maker Sichuan Chengfei Integration Technology Corp Ltd plans to take over the military assets of Aviation Industry Corporation of China (AVIC) for 15.8 billion yuan ($2.53 billion), transforming itself into a major-listed military aircraft and missile builder.

Sichuan Chengfei plans to place 955 million shares at 16.6 yuan per share to AVIC, Hongdu Aviation Industry Group and China Huarong Asset management Co Ltd in exchange for control of three AVIC subsidiaries, it said in a stock exchange statement late on Sunday.

China Huarong holds a 5.9 percent share of one of the AVIC subsidiaries, Shenyang Aircraft Industry Group Co.

In a separate deal, Sichuan Chengfei said it plans to raise 5.3 billion yuan via a share placement with AVIC and 9 other companies. Funds will be used to boost the performance of its fighter jets and other aviation weapons, it said without elaborating.

Chengdu Aircraft Industry Group and Shenyang Aircraft, two of the AVIC units that Sichuan Chengfei plans to take over, are major fighter jet makers in China, while Hongdu Aviation is the country’s major missile production base.

Sichuan Chengfei’s Shenzhen-traded shares have been suspended since Dec. 23 last year. It jumped to its daily trading limit at 16.7 yuan shortly after it resumed trading on Monday.

$1 = 6.2334 yuan Reporting by Fang Yan and Matthew Miller in BEIJING; Editing by Jacqueline Wong

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