Danish luxury electronics maker Bang & Olufsen aims to boost growth in China through a strategic partnership, to help offset weak western markets, and will raise 177 million crowns ($29.2 million) in a share issue to its two new partners.
The maker of up-market stereos and televisions has struggled in the global economic crisis, and in April reported worse-than-expected results for its financial third quarter as sales in Europe fell and product launches were delayed.
Bang & Olufsen said on Thursday it would issue new stock equal to an 8.35 percent increase in the share capital at market price to privately owned Sparkle Roll Holdings Limited and to A CAPITAL, a China-Europe growth capital fund.
"The strategic partnership will be important for accelerating our growth in China," Bang & Olufsen Chief Executive Tue Mantoni said in the statement.
Shares in Bang & Olufsen rose 3.3 percent to 62.50 crowns by 0810 GMT, outperforming a 0.8 percent rise in the Copenhagen bourse's benchmark index.
Sparkle Roll Holdings is wholly owned by Qi Jianhong and it owns 28 percent of Hong Kong-listed Sparkle Roll Group Ltd. , which is a distributor of luxury cars, jewellery, watches and fine wines in China, B&O said.
"Sparkle Roll has built a strong customer base of high net worth individuals and reliable relationships with luxury shopping malls in major Chinese cities," B&O said in the statement.
A CAPITAL is a private equity fund specialised in investing in European companies with growth potential in China, B&O said.
Sparkle Roll has subscribed for new shares corresponding to 6.12 percent of B&O's shares after the capital increase and A CAPITAL has subscribed for new shares corresponding to a 1.59 percent stake after the issue, Bang & Olufsen said.
The roughly 3.03 million new shares will be issued to Sparkle Roll and A CAPITAL at 60.22 crowns per share which is the average closing price over the past 30 days, B&O said.
The new shares are expected to be registered by Sept. 30 and begin trading as soon as possible after registration, B&O said. ($1 = 6.0652 Danish crowns)
This article is copyrighted by Reuters
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