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SHANGHAI: One of China’s biggest train makers said Wednesday it plans to raise 7.1 billion yuan (US$1.1 billion) through a rights issue, after a fatal crash last year starved the sector of funds.
State-owned China North Locomotive and Rolling Stock Industry Corporation (CNR), which makes trains for the Beijing-Shanghai high-speed rail line, will use the funds to upgrade technology and replenish working capital, it said in a statement.
A deadly rail crash near the eastern city of Wenzhou in July last year killed at least 40 people and prompted the government to slow investment in high-speed railway projects.
Following the crash the government recalled 54 bullet trains made by CNR and used on the Beijing-Shanghai line, returning them to service in November.
Another major train maker, CSR Corp — whose state-owned parent manufactured the trains involved in the July accident — unveiled plans last month to raise 9.0 billion yuan in a private placement of shares.
CNR would offer 2.08 billion shares priced at 3.42 yuan apiece, the statement said. The new stock will be offered to existing shareholders at a ratio of one new share for every four existing ones.
The company had originally planned to raise 10.7 billion yuan, according to a previous statement, but had scaled back the issue which was approved by shareholders and the government last year.
CNR shares closed up 1.32 percent at 4.60 yuan in Shanghai trading on Wednesday.
Source: AFP/ir
