Local gov't confident about future Taizinai Dairy
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The sole lease operator of Taizinai, a leading Chinese lactobacillus beverage producer, has expressed confidence in Taizinai even after its Cayman Islands arm was liquidated.
Wen Dibo, president of Zhuzhou High-tech Dairy, told Xinhua Wednesday that the liquidation wouldn't affect its lease operation of Taizinai.
Zhuzhou High-tech Dairy was founded by the municipal government of Zhuzhou in central China's Hunan Province to run Taizinai, hoping to ensure the company's survival and further develop the brand.
Taizinai has a debt of more than 2 billion yuan (293 million U.S. dollars) due to its rapid expansion, according to Wen. It has branches in the Chinese capital of Beijing, Hubei and Sichuan provinces, and in Cayman Islands. The expansion was supported by investment banks such as Actis Capital, Morgan Stanley and Goldman Sachs.
In mid April, the Supreme Court of the Cayman Islands declared Taizinai's branch there bankrupt due to its more-than-500-million-yuan debt to Citibank, which was also an investor in Taizinai's Cayman arm.
According to Wen, to bail out Taizinai, the government of Zhuzhou city, where Taizinai is based, set up Zhuzhou High-tech Dairy and approved it of acting as the sole lease operator of the lactobacillus drink maker in 2009.
Over the past year, the Zhuzhou High-tech Dairy has been searching for strategic investors for Taizinai. Two investment companies in Beijing and Shanghai agreed in January to make a combined investment of 500 million yuan, Wen said.
Wen said the Zhuzhou local government was confident Taizinai would prosper, and had decided not to dismiss any of the company's employees.
From February to December last year, Zhuzhou High-tech Dairy generated 544 million yuan in sales revenue through Taizinai. The milk drink maker's profits amounted to 44 million yuan, as Zhuzhou's High-tech Dairy improved its management systems and reduced production costs, Wen noted.
During the period, Zhuzhou High-tech Dairy paid off 180 million yuan of Taizinai's debts, Wen said.
And in the first quarter of this year, Zhuzhou High-tech Dairy paid off another 19.75 million yuan, Wen added
