Yongye International Inc. (Nasdaq: YONG) U.S.-listed shares rose 51.7% to $5.69 after the Chinese reverse-merger company announced a $50-million investment from Morgan Stanley’s Asian private-equity unit. Volume for the stock totaled nearly 8.5 million shares, or about seven times its full-day average.
Yongye intends to use the proceeds from this investment for capacity expansion, repayment of commercial bank debt, working capital, and general corporate purposes.
Yongye Chief Executive Officer, Zishen Wu commented, “We are pleased that MSPE Asia, one of the leading private equity investors in the region, has decided to make a significant investment in our company. Yongye and MSPE Asia have structured a long-term cooperation based on our mutual belief in the strong prospects for our products and nationwide distribution network.”
Wu continued, “Specifically, we are providing multi-year profit commitments to MSPE Asia which, upon their achievement, results in up to a $15.00-per-share conversion price for the convertible preferred stock we are issuing. This investment will assist us in strengthening our balance sheet and positioning us to meet the growing demand for our Shengmingsu agricultural nutrient products.”
Yongye International is a leading agricultural nutrient company headquartered in Beijing, with its production facilities located in Hohhot, Inner Mongolia. Yongye produces and markets two lines of organic nutrient products: a liquid nutrient product which is sprayed on plants and a powder nutrient product which is added to animal feed.