(Yicai Global) March 23 -- Jiangsu Yawei Machine Tool will raise CNY195 million (USD27.5 million) in a private placement, thereby becoming the first company in the Chinese mainland to release a refinancing plan since regulators recently issued new rules for listed firms bringing in strategic investors.

China Securities Regulatory Commission published the new regulations on March 20. They add the requirements that strategic investors must be able to bring leading core technologies to listed companies and significantly strengthen their competitiveness and innovation or contribute leading strategic resources in markets, channels and brands to boost their sales.

Yawei will issue new shares to state-backed JIC Investment to raise up to CNY195 million to repay bank loans and replenish its liquidity, per its announcement of the plan yesterday. Its shares [SHE:002559] hit the 10 percent daily upper limit today on the news to halt trading at CNY6.58 (93 US cents) at the lunch break, raising its market value to around CNY3.7 billion (USD521.5 million).

JIC Investment will take an about 6.43 percent stake in the firm after the refinancing concludes to become its second-largest shareholder after Jiangsu Yawei Technology Investment with its 6.97 percent stake,  calculated based on the upper limit of the refinancing.

Yangzhou-based Yawei develops, manufactures, and sells high-end, smart and automatic computer numerical control turret punching machines, CNC press brakes, CNC laser cutting machines, flexible cells and systems, according to information on its website.

Beijing-based JIC Investment formed in October 2012. It specializes in direct equity investment and fund management. Its parent China Jianyin Investment is a wholly-owned unit of state-backed investment company Central Huijin Investment, public information shows. it focuses on equity investments that promote technological progress and industrial upgrading, its website says.

JIC Investment qualifies as a strategic investor under the new standards, and its team has keen insights into and management experience in the development direction and key technology trends of precision laser processing equipment and smart manufacturing as experts on the sector, Yawei said in its announcement, adding JIC Investment will cooperate with it after the refinancing to jointly seek investment, mergers and acquisitions and help it develop its domestic and foreign markets.

The new regulations also specify listed companies' decision-making process for and information disclosure requirements for bringing in long-haul investors. Shangying Global, Fujian Oriental Silver Star Investment, and Shanghai Ace Investment & Development are now reevaluating their private offers, the companies announced after the new regulations came out.

Editor: Ben Armour