March 23, 2009
China's Sanlu Group carrying out second auction in April
Sanlu Group, the bankrupt Chinese dairy company involved in last year's contaminated milk scandal, will carry out a second auction on April 7 in Shijiazhuang to dispose its assets, according to an auction source on Saturday (Mar 21).
Hebei Jiahai Auction Co Ltd said the assets to be auctioned will include Sanlu's shares in four dairy plants as well as 169 of its protected trademarks and 12 patent rights.
The previous round of auction on March 4 saw Beijing-based Sanyuan Group bid RMB616.5 million to purchase Sanlu's core assets.
With its headquarters in Shijiazhuang, Sanlu was China's leading seller of milk powder for 15 years until the tainted milk scandal erupted in September last year. In 2007, the group's revenue hit RMB10 billion while Sanyuan's revenue was only RMB1 billion.
Many dairy producers were eyeing Sanlu's assets after it announced its bankruptcy on February 12.
However, bidders had to meet two criteria for the first auction whereby they are not involved in the melamine scandal and they must have a minimum of RMB1 billion in total revenue from sales of liquid milk and milk powder product last year.
Both of China's leading dairy producers, Yili and Mengniu, were unqualified to bid, as small proportions of melamine were also detected in their milk products.
Meanwhile, the auction house added that no special restriction has been imposed on the bidders for the upcoming second auction.
US$1 = RMB6.834 (Mar 23)
