China National Building Material Co (CNBM) is set to acquire a 20 per cent stake in Shanshui Cement Group for HK$1.56bn (US$201m).

Shanshui Cement will sell 563.2M new shares at HK$2.77 each, according to a statement to the Hong Kong stock exchange yesterday.

Shanshui said it plans to use the proceeds to replenish working capital, reduce its debt level and improve efficiency.  In a separate filing, CNBM said that the deal will promote cooperation with Shanshui and the “healthy development” of the regional cement industry.