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Second auction of scandal-hit Sanlu slated for April

(Xinhua)
Updated: 2009-03-21 20:38

SHIJIAZHUANG -- Another auction to dispose assets of Sanlu Group Co., the bankrupt Chinese dairy company at the center of the tainted-dairy scandal, will be held on April 7 in this capital of north China's Hebei Province, according to an auction source here on Saturday.

The Hebei Jiahai Auction Co. Ltd. said the assets to be put for auction will include Sanlu's shares in four dairy plants as well as 169 of its protected trademarks and 12 patent rights.

Prior to this, Beijing-based Sanyuan Group bid 616.5 million yuan (90 million US dollars) to buy Sanlu's core assets on March 4, which has been considered a government-supported buying.

Sanlu headquartered in Shijiazhuang had been China's leading seller of milk powder for 15 years until the melamine adulteration scandal broke in September last year. The group's revenue hit 10 billion yuan in 2007, while Sanyuan's revenue was only 1 billion yuan.

Many dairy producers eyed Sanlu's assets after it announced bankruptcy on February 12.

However, the first auction required bidders to meet two criteria: no involvement in the melamine scandal; and a minimum of 1 billion yuan in total revenue from liquid milk and milk powder product sales last year.

Both of China's leading dairy producers, Yili and Mengniu, were unqualified to bid, since the chemical substance melamine was found in their milk products, though in smaller proportions than that detected in Sanlu's products.

The auction house said on Saturday that no special restriction has been required on bidders' qualification for the second auction of Sanlu's assets.

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