Business

Published: 18 May 2009 23:43:24 PST

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May 19, 2009 (China Knowledge) – SVA Electron Co<600602><900901> announced today that its directorate has approved a proposal submitted by its controlling shareholder SVA Group to terminate the plan to acquire the remaining stake in SVA Optronics Co Ltd considering the weakening demand for LCD panels.

The proposal will be reviewed at the shareholders meeting to be held on Jun. 2, according to the company’s statement filed with the Shanghai Stock Exchange.

SVA Electron will also finalize the details of spinning off the fifth-generation LCD production line from at the shareholder’s meeting, said an unnamed source, the Shanghai Securities News reported.

However, the core business of SVA Electron after the spin-off still remains unclear, according to the report.

The Shanghai-listed company posted losses of about RMB 100 million in the first quarter of this year, after losing RMB 850 million in 2008.

Last June, SVA Electron planned to acquire a 62.5% stake in SVA Optronics from SVA Group and a 18.75% stake in the same company from SVA Information Industry Co Ltd <600637>. The acquisition, if completed, will make SVA Optronics a wholly-owned subsidiary of SVA Electron.

Shares of both SVA Electron and SVA Information Industry have been suspended from trading since Apr.15.


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