Vision Opportunity China Fund has invested USD3m in China Ceramics as part of a USD26m underwritten secondary public offering.
Roth Capital Partners acted as sole book-running manager of the offering with Maxim Group acting as a co-manager.
China Ceramics is a manufacturer of ceramic tiles in China. Its ceramic tiles are primarily used for exterior siding, interior flooring and design in residential and commercial buildings. It currently operates two facilities in Fujian and Jiangxi provinces, with a total capacity of approximately 38 million square metres.
The board, advised by Vision Capital Advisors, believes the Chinese ceramic tiles industry is fragmented and that the underlying domestic demand for ceramic tiles continues to grow driven by real estate development in tier II and tier III cities and continuing urbanisation.
China Ceramics started capacity expansion projects in 2009 and expects to increase the capacity of both its Fujian and Jiangxi facilities to 36.8 million square metres and 42 million square metres from 28 million square metres and ten million square metres, respectively. China Ceramics intends to apply the net proceeds of the offering, together with other cash on hand and cash from operations, to support these two projects.
In return for its investment, Vision Opportunity China Fund received 387,000 registered shares of China Ceramics’ common stock at a price of USD7.75 per share.
