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Taihua

  • BY: Andrew Hore |
  • POSTED: 25/08/2016 |

Taihua, which produces ingredients for traditional medicines, is raising £716,000 from an open offer at a premium to the market price.

The share price doubled to 2.25p but it is still below the 2.63p offer price. At the end of 2015, the NAV was around 16p a share. Shareholders can acquire one new share for every 3.00300641 shares.

The cash will help to fund a share buy back because moving cash from Chinese operations to the holding company is not tax efficient. The open offer is underwritten by Tao Ji.

Taihua can buy back up to 8.17 million shares at up to 105% of the average share price in the preceding five days. There is £500,000 earmarked for buy backs.

Taihua fell into loss in 2015 because of lower sales, but the company has successfully reapplied for the appropriate certifications and it hopes to regain market share.

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