Xian Aircraft to raise US$793m via sales to parent, investors

Shenzhen-Listed Xian Aircraft International Corp, an aircraft parts supplier to Boeing and Airbus, plans to raise CNY6 billion (US$793.13 million) via a share placement deal with its parent Xian Aircraft Group and other investors.

The funds from the sale of up to 660 million A shares for at least CNY9.18 per share will be used to buy military aircraft assembly lines from its parent, media reports said. Xian Aircraft will also purchase parts factories for the mainland's first regional jet, the ARJ-21.

"We can't provide details on what kind of military aircraft will be injected into the listed company, as it is subject to national security," said a Xian Aircraft official, reported The South China Morning Post.

The parent firm is also a subsidiary of China Aviation Industry Corp I (Avic I), which produces two bombers, the FBC-1 and H-6D.

The ARJ-21 won its first overseas order last month and will have its first test flight next year. The mainland is aiming to produce a 150-seat or above aircraft by 2020 to tap into the US$2.8 trillion worth of aircraft orders forecast globally by 2027.