CAIC Intend to Replace TSB in XAB Acquisition
Resource from: cbcc-yinx Likes:2908
Apr 10,2007
CAIC Intend to Replace TSB in XAB Acquisition
In an interview with 21th Century Business Herald on Apr. 9, an informative person from China Aviation Industry Corporation I (CAIC) reveal: “The TSB and XAB acquisition is over”, indicating CAIC’s ambition to acquire XAB.
XAB released a notice on Mar. 29, indicating the uncertainty of their previous equity transition deal with TSB Bearing. In the notice the company said: “However, we are still waiting for policy support by State-owned Assets Supervision & Administration Commission of the State Council, because the share transferred are owned by the state. Due to the uncertainty of establishment of such policy, the transition deal may take a long time to be completed. We will release the latest dynamics when possible.”
Based on such a “nothing-fresh” notice and the soar of XAB’s stock price during the period from Mar. 19 to Apr. 9, gossip of different kinds can be heard everywhere.
A man in charge from TSB Bearing said: “We hope the deal can be a success. However, we are unable to make sure what kind of decision the government will make. On the another hand, we still have other changes with regard to our strategy.”
“It would be the most satisfactory result that XAB was acquired by CAIC. Of course, it’s the very choice that local government would favor. In fact, it’s a matter of government leading that CAIC take control of XAB.” said a man with so much knowledge of XAB.
As a leading enterprise in Chinese aerocraft manufacturing industry, CAIC has 47 middle and large-sized industrial subsidiaries, 31 institutes, with total assets over 100 billion yuan. They mainly design, produce and sell military aerocraft, civil passenger plane, engine for aerocraft, craft equipped device etc. Also, they do a good job in the area of industrial combustion turbine, auto, motorcycle, machinery, material, IT, cooling, environment-friendly equipments etc.
For a long time, CAIC has been planning to acquire a bearing producer. In Sept. 2006, they participated in the LYC bid, but failed. Compared with the LYC that had no sufficient assets to repay their debt, XAB achieved a net profit of 21.64 million yuan in 2006.
(cbcc-yinx)
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