Loulan Holdings Ltd, a wine producer based in China's northwestern province of Xinjiang, is seeking to raise investment funds from a placement of shares in advance of its planned listing on the Hong Kong Stock Exchange's Growth Enterprise Market.

Incorporated in the Cayman Islands, Loulan is offering 100m new shares to professional and institutional investors at HK$0.50 per share. The 100m shares will represent 25% of the company's enlarged share capital.

Loulan posted a net loss of CNY1.05m on sales of CNY23.05m in 2001, against a net profit of CNY2.22m on turnover of CNY25.23m the year before.

The company expects the net proceeds from the issue to be HK$38.5m. Some HK$12m is to be used for the acquisition of distributors or establishment of joint ventures, while HK$3m will go towards setting up sales offices. A further HK$3m is earmarked for marketing and promotion, with around HK$10m to be used to buy vineyards and wineries. With HK$5m to be spent on an additional bottling line and other machinery, the balance of HK$5.5m is to be retained as general working capital.