(Yicai Global) Aug. 16 -- Shanghai Electric Group Co. [SHA:601727], a Chinese multinational power generation and electrical equipment making firm, will transfer all of its controlling stake in refrigeration equipment maker Shanghai Highly Group Co. [SHA:600619] in a deal worth CNY1.84 billion (USD275 million).
The controlling shareholder will make a public offer for the transfer of its 175 million shares, which make up 20.22 percent of the company's total share capital. This will transfer the firm to a new controller, Shanghai Highly said in a press briefing on Aug. 14.
Shanghai Electric intends to sell at CNY10.54 (USD1.58) a share. Shares in Shanghai Highly hit the 10-percent limit up on Aug. 14 to close at CNY10.93.
Shanghai Highly is mainly engaged in the air conditioning compressor business, with annual production capacity of 20 million units. The firm makes up one-seventh of the global market share.
The equity transfer is an important step for the reform of Shanghai's state-owned enterprises, 21st Centuyl Business Herald reported. If a deal goes ahead, Shanghai Electric Corp. will still hold a stake in three listed companies, Shanghai Electric Group, Shanghai Mechanical & Electrical Industry Co. [SHA:600835] and Shanghai Prime Machinery Co. [HKG:2345], and will be a step closer to its own listing.
"Shanghai Highly's core business is does not really correlate with Shanghai Electric Corp's. Divestiture of this business is for the overall listing of Shanghai Electric Corp.," 21st Century Business Herald cited a senior head at Shanghai Electric Group as saying.
Shanghai Electric Corp.'s overall listing will focus on new high efficiency and clean energy equipment.