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Changhe Auto to acquire aerospace assets

From:ReutersJuly 18, 2008

SHANGHAI, July 18 (Reuters) - Loss-making automaker Jiangxi Changhe Automobile Co, said on Friday it will acquire two aerospace units worth up to 920 million yuan ($134 million) from China Aviation Industry Corp and transform itself into an aerospace company.

Changhe Auto, controlled by AviChina Industry & Technology Co, will transfer all of its assets and liabilities and issue up to 90 million new shares to China Aviation in exchange for the two subsidiaries, it said in a statement.

The two subsidiaries' combined estimated value is 800 million to 920 million yuan, it said.

China Aviation Industry Corp is a state-controlled holding company set up to take control of the country's two state-run aircraft makers, AVIC I and AVIC II, which officially announced a merger plan last month.

Changhe Auto's A shares traded in Shanghai jumped by their daily limit of 5 percent to 5.65 yuan in morning trade, outperforming a 0.31 percent rise in the benchmark index. The shares had been suspended from trade since June 8. AviChina's Hong Kong-listed shares fell 1.9 percent to HK$1.55.
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