Japan's Mitsubishi Corp has scrapped its plan to acquire a 10-percent stake in China's SDIC Zhonglu Fruit Juice Co after the Chinese firm's share price surged since the beginning of the year.
Japan's largest trading company failed to reach an agreement with Zhonglu on the amount to be paid for the stake, the Beijing-based company said in a statement to the Shanghai Stock Exchange yesterday.
Zhonglu's shares have more than doubled since the beginning of the year but they lost 1.41 percent to close at 18.19 yuan (US$2.46) yesterday.
The announcement came three months after Mitsubishi agreed to buy 21.5 million shares, or 10 percent of Zhonglu's enlarged capital, at an undisclosed price in July.
It is part of Zhonglu's plan to introduce strategic partners through selling 50 million shares to 10 institutional investors including its parent, State Development and Investment Corp, and overseas investors.
The share sale is to help Zhonglu to expand the production of its fruit juices and fund new acquisitions, the company said in a statement.
"We will withdraw the application to the Ministry of Commerce to bring in overseas investors and continue to carry out the share sale." Zhonglu said yesterday.
Net profit of Zhonglu plunged 74 percent to 1.77 million yuan for the third quarter of this year as surging prices of raw materials raised its costs.
However, sales revenue for the first three quarters this year jumped 68 percent to 981 million yuan, the company said.
(Shanghai Daily November 16, 2007)