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dollar funds from Chinese banks to make the acquisition in cash if required. Because SZLN had raised approximately US$90 million equity funds in late 2006 and had accumulated profits in 2006 and 2007, its liabilities–assets ratio had decreased from approximately 70 per cent to 50 per cent over the 2006-2007 period. This financial slack provided the company with a degree of flexibility to take on this opportunity. Nevertheless, the future cash needs of PEM would need to be considered before…