Gome Telecom Equipment Plans to Raise Up to USD115 Million via Private Placement
Zhang Xia
DATE:  Sep 12 2017
/ SOURCE:  Yicai
Gome Telecom Equipment Plans to Raise Up to USD115 Million via Private Placement Gome Telecom Equipment Plans to Raise Up to USD115 Million via Private Placement

(Yicai Global) Sept. 12 -- Gome Telecom Equipment Ltd. [SHA:600898] put forward plans to raise at most USD115 million (CNY750 million) via a private placement to fund the construction of a research center and a marketing network.

Gome said yesterday that the shares supplied in the private placement will not account for more than 20 percent of the company's general capital from before the issuance.

Shandong Longji Island Construction Ltd., Gome's controlling shareholder, intends to purchase at least CNY400 million worth of shares and bring its stake in the firm to at most 22.08 percent.

The group will use the raised capital to build an intelligent terminal manufacturing center, a research center, a marketing network and an informatization platform. Investment in the intelligent terminal manufacturing center development project will total CNY150 million, an estimated CNY100 million of which will come from the private placement. It will take one year to construct. At designed capacity, the project's operational revenue will reach a predicted CNY150 million with an annual net profit of CNY23.5 million.

The firm's main businesses include the research, development, production and sales of smart mobile terminals. The private placement will spur main business growth. The intelligent terminal production facility will boost the group's competitive advantage as an original design manufacturer (ODM). By building the informatization platform, the company will connect its core businesses and provide software and hardware to support the firm's management in day-to-day operations.

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Keywords:   FINANCING,Fund,Gome Telecom Equipment,Original Design Manufacturer,Intelligent Terminal