The Beijing-Based Sanyuan Group is to purchase the 7 core plants of scandal-turned-bankrupted Sanlu, respectively located in Hebei, Shandong and Henan Provinces, revealed a Chinese newspaper.

In a report published on Monday, the 21st Century Business Herald, a leading Chinese economic newspaper, reported the details of the ongoing Sanyuan-Sanlu purchasing negotiation. The story gave out a list of names and locations of Sanlu's seven plants Sanyuan is considering buying.

Quoting an unidentified source, the report said four out of the seven plants are based at Shijiazhuang, capital of north China's Hebei Province and the headquarter of the Sanlu Group, while the rest are located in Hebei's Tangshan city, Shandong's Weifang city and Henan's Xinxiang city respectively.

All the seven plants are the Sanlu's core assets, with the Sanlu Group holding about 90 percent stocks in them, the report said.

The plants in Tangshan, Weifang and Xinxiang, all equipped with the latest production lines and technologies, are key projects in once prosperous Sanlu Group's expansion plan in 2006.

Beijing's Sanyuan will also assume some debt of the Sanlu Group, which face huge compensation after the tainted milk scandal, but no further detail on the debt issue is given.

Sanlu's assets' another bidder, Heilongjiang-based Wondersun Dairy Co. Ltd., which was said to take over one of Sanlu's plant located in Heilongjiang Province in an earlier report, denied its purchase plan.

"Wondersun Dairy is not satisfied with only acquiring one plant, it is waiting and it will throw out the offer again if Sanyuan and Sanlu's negotiation fails to reach an agreement." The same insider told 21st Century Business Herald.

Sanyuan sent earlier this month a team of 18 experts to Sanlu's Headquarter to study the feasibility of the acquisition.

If the purchasing deal is finally inked, it will cost Beijing Sanyuan Group 800 million yuan and the company will probably fund its purchases with bank loans.

Sanlu Group went bankruptcy amid its melamine tainted dairy products scandal. Hundreds of babies around the country have been found suffering from kidney failures ever since a first such case was reported in northwestern Gansu province in June this year. Some babies have even died out of eating Sanlu's poisoning dairy products, according to reports.

(CRIENGLISH.com November 18, 2008)