Nanjing Redsun raised 2 bn Yuan to acquire three Chinese agrochemical companies

Last week, the China Securities Regulatory Commission (CSRC) has approved a private refinancing plan regarding Nanjing Redsun’s private placement to Nanjing First Pesticide Group (NFPG).

Totally 2 Billion Yuan raised by Najing Redsun will be used in its M&A initiatives against three Chinese agrochemical companies owned by NFPG: Nanjing Biochem, Anhui Biochem, and Redsun Trading. Nanjing BioChem and Anhui BioChem are manufacturers mainly engaging in agrochemical and related intermediates such as paraquat, diquat, pyridine, trichloropyrid and PMIDA, and they each earned net profit of 1200 million Yuan and 1760 million Yuan last year, while Redsun Trading is a trading company mainly engaging in agrochemical, seeds and agricultural machinery business. These acquisitions will building Nanjing Redsun an integral system of intermediates, technical ingredients and formulation products in pyridine, pyrethroids and hydrocyanic acid business.

The former largest share holder of Nanjing Redsun, Redsun Group, will additionally offer 227 million shares at 9.18 Yuan per share to NFPG, who indirectly controlling Nanjing Redsun through holding 49% shares of Redsun Group, thus make NFPG a 44.75% owner and the largest owner of Nanjing Redsun. And Nanjing Redsun is expected to be the largest agrochemical company in China after the private offering.

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