China Power Equipment Inc. (CPQQ.OB) Finalizes $5M Equity Offering; Proceeds to Expand Subsidiary Operation
China Power Equipment Inc. operates through its subsidiary Xi’an Amorphous Zhongxi Co. Ltd. to manufacture energy saving electric transformer cores and transformers in the People’s Republic of China. The company announced last week that it has completed a $5 million equity offering through a private placement to certain investors.
The company will use the funds to complete Xi’an Amorphous’ plant, which is currently under construction, to ultimately expand alloy transformer core production.
“We are very pleased to complete this financing that will help continue our growth and success in the high-growth amorphous alloy core business. Our capacity expansion will enable us to win and deliver larger orders for transformer cores and to generate very attractive positive operating cash flows. The positive cash flows will also help us expand into our new line of amorphous core transformers,” Yong Xing Song, chairman of the board of China Power stated in a press release.
China Power said it anticipates that the expansion will enable the company to meet amorphous alloy core demand, which has increased due to the Chinese government’s mandate that alloy transformers replace the less energy efficient old steel core electric transformers.
“Because China is upgrading to amorphous alloy electric transformers in both urban and rural areas, the demand for our amorphous alloy cores and transformers is expected to continue to increase at an increasing rate for several years,” Yong Xing Song stated.
Amorphous alloy transformers consume less electricity, as well as reduce the need to generate electricity, thereby reducing coal burned and reducing air pollution.