Beijing,Feb 16 - Beijing Sanyuan Foods Co said on Saturday it will bid for assets of the bankrupt Sanlu Dairy Group, whose former chief faces jail after the company sold deadly tainted milk powder.
In a notice to the Shanghai stock exchange the listed arm of Sanyuan said buying the disgraced Sanlu's dairy production assets would help "improve the company's product structure and rapidly augment production capacity to expand across the market nationwide".
The bankrupted firm's assets will be sold on March 4 in Shijiazhuang, capital of Hebei province and home of the defunct Sanlu, which was previously 43 percent-owned by New Zealand's Fonterra dairy group.
The main Sanyuan group and its Hebei arm will jointly bid for assets, said the notice.
The auction comes after Tian Wenhua, former chairwoman of the Sanlu Group, was sentenced to life in prison last month for her role in the toxic milk scandal which erupted last year. She has appealed against the sentence.
Sanlu had borrowed $132 million to pay medical fees for the 300,000 children that fell ill last year after they drank milk laced with melamine, a toxic industrial compound.
At least six Chinese children died from kidney stones and other agonising complications caused by the tainted milk.
Sanyuan said the assets up for sale were worth about 726 million yuan ($106 million), including big stakes in several regional dairy businesses.