Weifang Yaxing to Sell Assets to Controlling Shareholder      

Weifang Yaxing Chemical Co., Ltd. (SH: 600319) plans to sells all its 45% stake in LANXESS Yaxing Chemical (Weifang) Co., Ltd. to its biggest shareholder, Weifang Yaxing Group Co., Ltd., for RMB33.5 million, it said on August 19th.
   LANXESS Yaxing was founded in 2004 in Weifang, Shandong province, as a joint venture between Weifang Yaxing and German company LANXESS. The venture manufactures hydrazine hydrate, a raw material for ADC foaming agent, to mainly serve Yaxing Group, with the rest being distributed in both domestic and foreign markets.
   The hydrazine hydrate facility has been in abnormal operation because of problems in equipment and supporting engineering works as well as unstable steam gas supply, which has led to a confirmed loss of RMB27.55 million.
   As of June 30th, 2009, LANXESS Yaxing's total assets stood at RMB269.64 million, and had a debt of RMB217.61 million. This translates into a net asset of RMB52.03 million. The company reported a loss of RMB18.748 million in the first half of 2009.
   Once the transfer is complete, Yaxing Group will keep upgrading the hydrazine hydrate facility so that it could return to normal operation as soon as possible, which would ensure the raw material supply for its ADC foaming agent operations.