SHIJIAZHUANG, March 3 (Xinhua) -- Sanlu Group, a Chinese dairy company at the center of a milk contamination scandal and declared insolvent by court, will be auctioned on Wednesday at a court in this capital of north China's Hebei Province.

    The auction company, the Hebei Jiahai Auction Co. Ltd., on Tuesday declined to disclose how many dairy producers will attend the bidding.

    The share price of Sanlu's potential buyer, the Beijing Sanyuan Foods Co Ltd., rose by the daily limit-up of 10 percent on Tuesday, as the auction drew near.

    Sanyuan was among the first batch of domestic dairy makers to express interest in buying Sanlu's remaining assets, a move encouraged by the central government to consolidate the industry.

    The Beijing Sanyuan Group Co. Ltd., the parent company of the Beijing Sanyuan Foods Co Ltd., said Tuesday it would make a joint bid with the Hebei Sanyuan Foods Co Ltd., the subsidiary of the Beijing Sanyuan Foods Co Ltd., told Xinhua on Wednesday.

    "We submitted an application for bidding to the auction house today and paid 200 million yuan (29.4 million U.S. dollars) as a deposit," said Fan Xueshan, a board director of the Sanlu Group.

    He said he would attend the auction on behalf of the joint bidder.

    Sanyuan estimated the Sanlu's assets at 800 million yuan and Fan was authorized by a temporary shareholders meeting to make a bid of no more than 880 million yuan, he said.

    "If the bid is higher than 880-million-yuan limit, then we have to hold another shareholders meeting for discussion," he said.

    The Beijing Evening News quoted its source as estimating Sanlu's assets at 726 million yuan.

    The auction company said Sanlu's land use rights, buildings, machines and equipment will be up for bidding at Wednesday's auction at the Intermediate People's Court of Shijiazhuang.

    The same court declared Sanlu bankrupt on Feb. 12 on charges of its failure to repay outstanding debts, which surpassed its assets.

    On Dec. 19, the group borrowed 902 million yuan to pay the medical fees of children sickened by baby formula tainted with melamine and to compensate victims, which increased its debt to 1.1 billion yuan.

    Sanlu stopped production on Sept. 12. Its melamine-tainted baby milk powder was found to have caused the deaths of at least six children and sickened more than 300,000 other children.

    Sanlu leased its plants to a subsidiary of Beijing Sanyuan Foods Co. Ltd. in December, days after the bankruptcy petition was accepted by the Shijiazhuang Intermediate People's Court.

    It was fined 49.37 million yuan by the Shijiazhuang court. The same court also imposed a life sentence for Sanlu chairwoman Tian Wenhua