AUTO parts maker Sichuan Chengfei Integration Technology Corp. plans to take over the military assets of Aviation Industry Corporation of China (AVIC) for 15.8 billion yuan (US$2.53 billion), transforming itself into a major-listed military aircraft and missile builder.

    Sichuan Chengfei plans to place 955 million shares at 16.6 yuan per share to AVIC, Hongdu Aviation Industry Group and China Huarong Asset Management Co. in exchange for control of three AVIC subsidiaries, it said in a stock exchange statement yesterday.

    China Huarong holds a 5.9 percent share of one of the AVIC subsidiaries, Shenyang Aircraft Industry Group Co.

    The proposal by Sichuan Chengfei comes as the government aims to channel private capital to State-owned enterprises, including aerospace and defense industry, to inject much-needed vigor to these sectors as the country’s economic growth slows.

    In a separate deal, Sichuan Chengfei said it plans to raise 5.3 billion yuan via a share placement with AVIC and nine other companies. Funds will be used to boost the performance of its fighter jets and other aviation weapons, it said, without elaborating.

    Chengdu Aircraft Industry Group and Shenyang Aircraft, two of the AVIC units that Sichuan Chengfei plans to take over, are major fighter jet makers in China, while Hongdu Aviation is the country’s major missile production base.

    The transaction would “give military assets better access to capital and strengthen research and development of aviation products,” Sichuan Chengfei said in a statement yesterday.

    The shares of Sichuan Chengfei rose by its 10 percent daily upper limit to 16.67 yuan after resuming trading yesterday. Its shares had been suspended from trading since Dec. 23, 2013 pending an announcement of a major asset reorganization. (SD-Agencies)