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Xugong paves way for capital raising

Construction machinery maker Xugong Group is making plans to raise new funds after a proposed investment by US private equity firm Carlyle Group was called off, the Wall Street Journal reported. On Friday, Jiangsu-based Xugong said it would inject US$819.8 million of assets into its listed subsidiary, Xuzhou Construction Machinery Science and Technology. The paper said that the asset injection makes the listed subsidiary more attractive to investors and will in theory allow it to raise additional capital through a share placement or secondary offering. Shares of Xuzhou Construction were bolstered by the news, rising by the daily 10% limit to RMB15.98 (US$2.34). The plan is still subject to shareholder approval.

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