Want Want China Holdings Ltd (中國旺旺控股), the nation’s largest maker of rice cakes and flavored milk, said parent company Hot-Kid Holdings Ltd plans to sell Taiwan depositary receipts backed by shares in the company this year.
The number of shares to be offered won’t exceed 250 million, or 1.89 percent of outstanding stock, Want Want — controlled by Taiwanese billionaire Tsai Eng-meng (蔡衍明) — said in a statement to the Hong Kong Stock Exchange yesterday.
The Taiwanese government said in July that it it would allow companies listing in Taiwan to use the proceeds in China. It also scrapped a rule banning companies with Chinese investors from selling shares on Taiwan’s stock exchange. Want Want is listed in Hong Kong.
An application will be made to Taiwan’s stock exchange this month, Want Want chief financial officer Everett Chu (朱紀文) said yesterday in an investor briefing organized by Grand Cathay Securities Corp (大華證券). Officials at Grand Cathay declined to say whether it would underwrite the sale.
The company plans to spend US$150 million to US$200 million to expand factories in China next year, Chu said.
Capital expenditure will be US$180 million this year, he said.
Want Want earns about nine-tenths of revenue by selling rice crackers, snacks and drinks such as Hot-Kid milk in the world’s most populous nation.
Retail sales in China, the world’s fastest-growing major economy, rose by at least 19 percent in each of the first seven months, increasing by 23.3 percent in July, the fastest pace since at least 1999.
The company doesn’t plan to seek acquisitions in China, Tsai said yesterday.
Tsai, 51, is Taiwan’s ninth-richest person, with a net worth of US$2.6 billion, Forbes magazine reported.
Want Want rose 0.3 percent to close at HK$3.49 in Hong Kong trading. The stock has risen 16 percent since it started trading, compared with an 8.8 percent decline in the benchmark Hang Seng Index.
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