Nationstar to Become State-Owned Company After New Round of Financing

Chinese LED manufacturer Nationstar announced a new round of financing on Sept. 29, 2014 to fund the production expansion for small pitch LED display and outdoor LED display components, according to China Securities Network. After the financing, the company will become a subsidiary of Chinese state-owned Guangdong Guangye Assets Management.

Nationstar will issue 45 million stocks at a price of RMB 9.13 per share to Rising Nonferrous Metals (RNM) and CGB. The total financing will not exceed RMB 410 million (US $66.77 million).

RNM is a state-owned company that is a wholly owned subsidiary of China’s Guangdong Guangye Assets Management. All funds raised under CBG will be invested in Nationstar’s private stock issuance. The fund will be managed by Guangdong Guangye Assets Management, while funding from Nationstar employees will be capped at RMB 91.30 million.

Notably, this recent funding will lead to changes among Nationstar’s major stockholders. During the planning, promotion, and non-public offering period, RNM’s wholly owned subsidiary in the electronic industry plans to acquire Foshan Sigma Trade’s 14.03 percent stake in the company, and indirectly become the largest shareholder. After the financing round, RNM will directly own 7.37 percent of company shares, and will have decision rights, in addition its subsidiary China Electronics Corporation will possess another 12.70 percent of shares. The two companies will have a total of 20.07 percent shares, making the group the largest shareholder. In other words, Nationstar will become a listed company managed by Guangdong Guangye Assets Management.

Following the private placement plan for 2014, Nationstar’s new announcement indicated the company will be terminating its non-public offering for 2013. The 2013 private placement was halted because of “changes in government policy,” said Nationstar. According to the company’s non-public offering announcement in September 2013, the company would be raising RMB 630 million to invest in the company’s semiconductor and epiwafer projects.

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