It is reported that electric equipment producer Shanghai Zhixin Electric plans to issue 60.41 million shares in a private placement to State Grid Electric Power Research Institute, a company affiliated to the State Grid, in order to purchase stakes in nine non-crystalline alloy enterprises from the latter.

The issue price was fixed at CNY 11.4 per share, equivalent to the 20-day average stock price of Shanghai Zhixin Electric prior to the suspension of share trading. The nine non-crystalline alloy enterprises produce non-crystalline alloy transformers.

The assets to be transacted have an assessed value of CNY 689 million representing a premium of 58.76% compared to the assets’ book value of CNY 434 million as of June 30 2011. The assets to be transacted recorded return on net assets of 37.13% in 2009 and 29.64% in 2010.

According to consolidated financial data, the assets to be transacted generated operating revenue of CNY 1.399 billion and net earnings of CNY 22.14 million in the first three quarters of 2011.

During the same period, Shanghai Zhixin Electric posted revenue of CNY 968 million and net earnings of CNY 133 million.

(Sourced from Shanghai Securities News)