According to China's financial newspaper 21st Century Economic Report, Morgan Stanley has finished a low profile transaction with Sichuan Huaton Industry Commerce Development Shareholding Co., which is said to be China's largest maker of polyphenylene sulfide resin (PPS).

The story said Morgan Stanley has helped Huaton finance US$200 million by issuing bonds to Morgan Stanley's equity management subsidiary. In addition, Morgan Stanley inked an agreement to buy less than 20 percent of Huaton's stake with US$80 million.

The China Engineering Plastic Industry Association confirmed that Huaton has larger capacity than the other two PPS manufacturers in China, both also located in Sichuan province.

Huaton's capacity will reach 35,400 metric tons by the time it finishes the ongoing expansion. China's demand for PPS, on the other hand, will top 70,000 metric tons by 2010, the report said.

Huaton also is considering going public outside of China. That certainly is something Morgan Stanley is looking forward to.