Chinese baby formula maker tests investor appetite

Yashili, whose products were found to be contaminated with melamine in 2008, is looking to raise up to $398 million from a Hong Kong public offering.

Two years after the melamine-tainted milk scandal that killed at least six babies and made thousands ill, a Chinese milk company whose products were found to be contaminated with the toxic substance at the time, is testing the appetite for its products among equity investors.

Yashili International Holdings and its existing shareholders are looking to raise as much as $398 million from a Hong Kong initial public offering that will be used to fund its business development.

The company makes milk formula for infants, young children and expectant and nursing mothers and has a leading position in second- and third-tier cities in China. As of June 30, 2010, it primarily sold its products...

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