(Yicai Global) June 18 -- Equipment supplier Jiangsu Shentong Valve will bring in up to CNY360 million (USD58.7 million) via a private placement to develop used nuclear fuel treatment equipment to meet rapidly rising demand in China, the company said in a statement yesterday.

Used nuclear fuel is radioactive atomic waste generated from the operation of nuclear power plants. It must be post-processed for recycling, and it is toxic to the environment. The number of China’s nuke plants is mushrooming, but the spent fuel treatment industry is still in its infancy, so, the gap between used fuel output and post-processing capacity is widening and huge demand exists for the build-up to narrow it.

The major supplier of nuclear power valve products will allocate CNY150 million of the proceeds to the project, while the remainder will go to supplement working capital and repay bank loans, it added in the statement.

Shentong Valve [SHE:002438] closed 0.60 percent higher today at CNY8.41 (USD1.19) after climbing 1.79 percent to a four-month high of CNY8.51 in the morning on the news.

The company, which is based in Qidong just across the Yangtze from Shanghai, will build industrial production capacity of various special valves, liquid treatment circulation systems, special sample bottles and other products such a treatment system requires upon completion of the project, and this will aid China’s development of its own technology, per the statement.

The firm has logged many orders for its various types of reprocessing equipment, and these have overwhelmed its current production capacity. The project will greatly enhance its output of these products, it said.

The asset management firm of the company's actual controller, acting in concert with Shentong Valve's President Wu Jianxin and other company insiders, plan to subscribe 72 percent of the additional shares, reflecting these insiders' confidence in the project.

The remaining 28 percent will be taken by a private fund set up by a unit of China Aerospace Science and Technology Group, per the announcement.

Editor: Ben Armour