Bright Food may raise $916 million selling bonds in China, listing unit

Bright Food Group Co., White Rabbit brand candy is arranged for a photo in Shanghai on April 1, 2011. Photographer: Nelson Ching/Bloomberg

Bright Food Group Co., Shanghai’s biggest food and dairy company, may raise as much as 6 billion yuan ($916 million) this year by selling bonds and listing a unit to fund acquisitions and boost production capacity.

A Hong Kong initial public offering of unit Yunnan Yinmore Sugar Co. may raise 2.5 billion yuan to 3 billion yuan, Chairman Wang Zongnan said in an interview yesterday. A bond sale in China may raise another 3 billion yuan, he said.

Bright Food may also list its food assets as a group in Hong Kong in three years as it seeks to buy overseas companies in industries including sugar, dairy, and food production and distribution, Wang said. The Shanghai-based company aims to boost revenue from outside China to as much as 30 percent of sales in five years from 5 percent now, he said.

“We want to become a first-class Chinese company with global influence within five years and overseas expansion is a must,” Wang, 55, said at the company’s headquarters in central Shanghai.

Bright Food, which is at least partly owned by the Shanghai government, plans to sell the bonds with a 5 percent coupon, Wang said. The company has a total of about 8 billion yuan in bonds maturing by 2013, according to data compiled by Bloomberg.

The maker of Chinese candy brand “Big White Rabbit,” with interests that span farming, food and beverage production and retailing, was established by combining four state-owned companies in August 2006, according to its website.

Yoplait, GNC
Bright Food lost a bid to buy 50 percent of French yogurt maker Yoplait last month. General Mills Inc. said March 18 it was in exclusive talks to buy the stake.

The company inquired last year about acquiring GNC Holdings Inc., the Pittsburgh, Pennsylvania-based retailer of vitamins and supplements that raised $360 million in an initial public offering.

Bright Food is interested in forming a joint venture with GNC to sell the U.S. company’s products in China, Wang said. It won’t buy publicly traded shares of the U.S. company, he said.

Bright Food has the most market share of convenience-store operators in China at 15.6 percent last year, more than double that of second-ranked Brilliance Group Co., according to Euromonitor International.

Profit Growth
Wang’s company has four domestically traded units: Bright Dairy & Food Co., Shanghai Jinfeng Wine Co., Shanghai Haibo Co. and Shanghai Maling Aquarius Co.

Bright Dairy fell 0.4 percent to 10.03 yuan in Shanghai trading. The stock has lost 2.4 percent over the past year, compared with a 5.7 percent decline for the benchmark Shanghai Composite Index.

Bright Food’s 2010 profit increased 45 percent to 3.2 billion yuan as sales rose 22 percent to 61.8 billion yuan, it said Jan. 26.

“Bright” is a brand created by Shanghai Yimin Foods Co., one of the four companies that merged to form Bright Food, soon after the Communist Party took power in 1949. One of the engineers at Yimin shortly after it was formed was former Chinese leader Jiang Zemin.

--Michael Wei. With assistance from John Liu in Beijing and Stephanie Wong in Shanghai.