(Yicai Global) March 8 -- Shares in Visionox Technology hit limit up after its owner yielded control over the Chinese organic light-emitting diode display screen supplier to the Hefei municipal government to pay off debts owed by another business.

Visionox’s share price [SHE:002387] shot up 10 percent to hit CNY10.84 (USD1.67).

Wang Wenxue, who also owns troubled property developer China Fortune Land Development, will transfer 11.7 percent of Visionox shares held by his investment firm Tibet Zhihe Capital Management to Hefei Jianshu Investment, which belongs to the Hefei government in eastern Anhui province, Visionox said yesterday.

The move will give Hefei Jianshu a controlling stake of 21.33 percent and that of Tibet Zhihe will be diluted to 18.43 percent. The transaction price has not yet been determined, but based on Visionox’s closing price of CNY9.85 per share on Friday, the deal will be in the range of CNY1.5 billion (USD230.5 million).

Beijing-based China Fortune has racked up debts of CNY11.1 billion (USD1.7 billion) and is in crisis talks with creditors after failing to repay CNY5.3 billion in loans this year due to a cash crunch, the firm said on Feb. 1. Chairman Wang blames the real estate giant’s liquidity woes on the pandemic, the company’s reckless expansion and its misjudged assessment of the state of the real estate markets around Beijing.

Visionox, which ranked among the world’s top three suppliers of active-matrix OLED displays for smartphones in 2019, has debt issues of its own due to heavy investment in new production facilities. It has projected losses of up to CNY802 million (USD123.3 million) in 2020, a narrowing of nearly 15 percent from 2019, according to its earning forecast released in January.

The Kunshan, eastern Jiangsu province-based firm makes advanced AMOLED displays mainly used in smart phones, smart wearables and on-board display devices that are lighter, thinner, more energy efficient and have a larger viewing angle than conventional liquid crystal displays.

Its CNY44 billion (USD6.7 billion) 6th generation flexible AMOLED production line, built together with the Hefei government, was put into production last December, with an output of 30,000 pieces a month.

China Fortune’s stock price [SHA:600340] was trading up 4.38 percent at CNY8.10 (USD1.24) at 2 p.m. China time, after earlier in the day reaching CNY8.54.

Editor: Kim Taylor