Chairman says no plans to list GOME on the mainland
Updated: 2009-07-01 07:15
By George Ng(HK Edition)
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HONG KONG: GOME Electrical Appliances Holdings Ltd, one of the country's leading home appliances retailers, says it has no plans to list its shares in the mainland market.
"We currently have no plans to list our shares in the A-share market," chairman Chen Xiao told reporters after the company's annual general meeting, referring to the mainland stock markets in Shanghai and Shenzhen.
"We also have no need to raise more funds," he added.
The company announced last week plans to raise not less than HK$3.25 billion by issuing convertible bonds and new shares.
It will sell 1.59 million yuan of convertible bonds to private-equity firm Bain Capital LLC and HK$1.66 billion in new shares to existing shareholders in a rights issue.
Analysts estimate that GOME should manage to move to a net cash position upon the completion of the fund-raising exercise.
The new capital will be used as general working capital, the company said earlier.
Chen said yesterday that the shareholder structure of GOME should be "optimized" after the fund-raising exercise.
Bain Capital will become GOME's second-largest shareholder, with a stake of between 9.8 percent and 23.5 percent, assuming the full conversion of the convertible bonds and depending on shareholders' response to the right issue, GOME said earlier in a statement.
Bain Capital underwrites the new shares offered in the rights issue.
GOME's founder and former chairman Huang Guangyu, who currently holds a 35.6 percent stake in the company, will remain the largest shareholder even if he does not participate in the rights issue.
Huang has been detained by mainland police authorities since last November for alleged economic crimes.
Chen said GOME's new management team will be more efficient.
According to the subscription agreement on the convertible bonds, Bain Capital can nominate three non-executive directors to GOME's board.
Chen declined to comment on whether Huang will proceed with his plans to sell his other retail businesses to the listed company.
GOME operated 859 self-owned stores in 205 large- and medium-sized mainland cities as of end-2008, of which 537 are located in first-tier cities.
(HK Edition 07/01/2009 page4)