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Inspur International to buyout a communication firm in Jinan

Published: 04 Jun 2009 01:00:03 PST

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Jun. 4, 2009 (China Knowledge) - Inspur International Limited<0596> said that it will buyout a communication subsidiary called Jinan Communication from its parent Inspur Group at a cost of RMB 130 million, according to the company's statement filed with the Hong Kong Stock Exchange (HKEx).

The acquisition will make Inspur International the sole owner of Jinan Communication, which holds a 30% stake in Qingdao LG Langchao Digital Communication Co Ltd, a joint venture developed by LG Electronics Inc and Inspur Group.

The company hopes to expand and supplement its existing information technology (IT) services through the acquisition and to improve its telecommunication supply chain for greater opportunities in China's 3G era.

Last month, Inspur International said it would issue 310 million new shares at an average price of HK$1.4 apiece. The company planned to raise HK$434 million (US$56 million) from the share sale. It said the proceeds from the issuance would be used to fund the company's further business expansion.

The possible share issuance is expected to lower Microsoft Corp's stake in Inspur International from 26.80% to 25.01%, if the U.S. software giant does not subscribe new shares.

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