(Yicai Global) July 19 -- Shares of Avicopter advanced after the Chinese civil helicopter manufacturer said it will take control of its parent's helicopter business by buying two units for CNY5.1 billion (USD707.1 million) to increase sales.

Avicopter [SHA: 600038] moved 4.7 percent up intraday and closed 2.5 percent higher at CNY41.71 (USD5.80).

The company intends to issue shares to its parent AviChina Industry & Technology and the parent's controller Aviation Industry Corp. of China to purchase all shares of Changhe Aircraft Industries Group and Avic Harbin Aircraft, the Beijing-based buyer said in a statement yesterday. In addition to the CNY5.1 billion, the company will additionally raise up to CNY3 billion to support operations. 

The deal has been in the works since December. The two units could enlarge Avicopter's product portfolio as Changhe Aircraft mostly makes Z-8 and Z-10 helicopters and their parts whereas Avic Harbin Aircraft produces parts but also develops compound materials.

Moreover, the widening balance sheet could improve Avicopter's performance as the firm posted a net profit of CNY387 million (USD53.7 million) last year, down over 60 percent from 2021, while its revenue slid nearly 11 percent to CNY19.5 billion (USD2.7 billion).

AviChina Industry & Technology is mostly Chinese-owned as AVIC, a state-owned aerospace and defense conglomerate, holds more than half of its shares while European aircraft maker Airbus has 4 percent of the total.

Editor: Emmi Laine