Because of huge losses suffered by Guizhou Tyre Co. Ltd. (000589.SZ), the 1.27-billion-yuan financing plan of the company is unlikely to be implemented.
Guizhou Tyre announced on Feb. 19 that since the announcement of the rights offering, business operation of the company changed significantly, which makes it unqualified to issue rights, and it decided to withdraw the rights issue application documents from China Securities Regulatory Commission.
Guizhou Tyre released last August the rights issue plan, under which it planned to ration no more than 3 shares to every 10 shares to all shareholders and to raise up to 1.27 billion yuan. All the funds will be used for the special tire relocation program.
According to relevant rules over rights issue, listed companies should make profit for three consecutive fiscal years.
Guizhou Tyre predicted in January that due to sluggish tire market demand and increasing losses of the company’s provision for impairment asset losses, the company would loss 240 million to 290 million yuan in 2015.
