The local government plans to sell a 49 percent stake in China's top machine tool manufacturer, Shenyang Machine Tool Group.

 

Shenyang State-owned Assets Supervision and Administration Commission said that the sale was taking place in order to diversify the company's ownership and improve its competitiveness.

 

The firm is one of the major machine tool research and development firms in China. Its high-end products had an almost one-fifth share of the domestic market last year.

 

The Shenyang commission has set out a number of requirements for investors wishing to bid for the stake in the State-owned firm.

 

The commission will sell the stake to three investors with a lock-up period of five years, according to a statement issued by the company.

 

Overseas investors will be allowed to hold a combined stake of no more than 30 percent.

 

The statement said the commission would prefer to sell the stake to large corporations from among China's top 100 manufacturers or the world's top 500 firms, or to machine industry companies.

 

The commission will hold a large-scale introduction and promotion conference tomorrow in Shanghai's Shangri-La Hotel, which will be attended by top company officials.

 

After the sale, the Shenyang commission will keep a 51 percent stake in the firm.

 

The company said that it hoped the sale would "set an example" in the reform of large-scale State-owned enterprises.

 

The company has witnessed dramatic development since a renewal of its management team and an upgrading of its technology in 2000.

 

In 2004, it purchased German firm Schiess AG, greatly expanding its business scope and research and development capabilities. In addition, it invested 1.8 billion yuan (US$228 million) in 2004 to establish a CNC industrial park, the biggest in the nation, in the city's Tiexi District.

 

A company source said its CNC production and sales had risen 52.6 percent in the first 10 months of this year, while exports were up 168 percent over the same period.

 

Due to its dominant position in domestic machine tool industry, the sale has already attracted a great deal of interest.

 

According to Hong Kong's South China Morning Post, this sale has already attracted more than 40 potential investors.

 

More than 70 percent of the interested investors are from overseas, said Liu Chuanwen at the Shanghai United Assets and Equity Exchange, who helped organize the sale.

 

(China Daily November 28, 2006)