ZC Rubber revises project funding after lower-than-expected IPO proceeds

Shanghai – Zhongce Rubber Group (ZC Rubber) has revised its use of IPO proceeds after raising less than expected from its recent listing on the Shanghai Stock Exchange. (ERJ report)

In a 25 June filing, the Chinese tire maker said it raised gross proceeds of Yuan4.06 billion (€488 million), below the initial target of Yuan4.85 billion. After deducting issuance costs, net proceeds stood at Yuan3.93 billion.

The shortfall has now prompted ZC Rubber to adjust its project funding mix, reducing the allocation of IPO funds in two major projects.

The planned IPO investment in a 2.5-million-unit all-steel radial truck tire project in Qingquan has been cut from Yuan850 million to Yuan325 million.

Similarly, the allocation to the "expansion and storage" project at the Chunqiu plant in Jiande has been reduced from Yuan600 million to Yuan180 million.

The company said it would cover the funding gap using internal resources.

Other allocations remain unchanged, including Yuan1.7 billion earmarked for the Chaoyang high-performance radial tire “green 5G digital factory” project, which has a total investment cost of Yuan3.2 billion.

ZC Rubber also plans to invest Yuan850 million in its Tianjin project for high-end green engineering tires, and Yuan600 million in Thailand to expand capacity for 7 million units of high-performance semi-steel radial passenger car tires.

According to its latest filing, the company reported revenue of Yuan35.1 billion in 2023 and Yuan18.4 billion for the first half of 2024.

Net profit stood at Yuan2.6 billion in 2023 and Yuan2.54 billion for first six months of 2024.