[photopress:arj21_1.jpg,full,alignright]Xi’an Aircraft International plans to raise at least RMB6 billion ($770 million) selling new shares to its parent and other investors to help finance development of China’s first domestically produced commercial aircraft.
The company, the country’s second-largest listed aerospace firm by revenue, will sell 660 million shares on the Shenzhen Stock Exchange. At least 55% of the shares will be bought by its parent, Xi’an Aircraft Industry (Group), which has agreed to pay RMB9.18 a share.
The sale will more than double the number of outstanding shares. The company currently has 626 million shares, 43% of which are held by its parent.
Proceeds from the share sale will help fund development of the Advanced Regional Jet 21, or ARJ21, a small feeder plane that will seat up to 90 passengers. As China’s first domestically designed and manufactured commercial aircraft, the plane’s main body was completed and displayed in Shanghai last month and is due to make its first test flight in March next year.
The jet is the first step in the nation’s program to build a 150-passenger airliner to compete with Boeing and Airbus for a share of the US$2.8 trillion coming up in international airplane orders over the next 20 years.
The company currently makes parts for Boeing and Airbus, including tail fins for 737-700s and wing parts for Airbus A320s. The company posted a net profit of RMB63 million on sales of RMB1.78 billion in 2006.
Source: Shanghai Daily