Railroads News
- China Railway Engineering plans dual IPO
Date: 1-Nov-2007 Sources: (Shenzhen Daily)
CHINA Railway Engineering Corp. plans to raise more than US$3 billion in a Shanghai and Hong Kong dual initial public offering by early December, according to sources familiar with the deals.
The Ministry of Railways has made financial reform of the sector a priority, urging railway operators and equipment makers to list their shares to boost capital and strengthen management.
The government has budgeted spending US$200 billion for 2006-2010 to free up bottlenecks in its rail system, making the sector attractive for investors and lifting stocks such as Shanghai-listed Zhuzhou Times New Materials Technology and Daqin Railway.
State-run China Railway Engineering, the world's third-largest construction contractor by revenue, intends to sell about 40 percent of its enlarged share capital in the listings, or 22 percent in Shanghai and 18 percent in Hong Kong.
The Shanghai listing is expected in late November or early December, while the Hong Kong listing is slated for a few days after that, the sources said.
Because of the booming stock markets in Shanghai and Hong Kong, China Railway Engineering increased its fundraising target from an initial US$2 billion, and the final size will depend on the market conditions, the sources said. One source involved in the deal said the listing could raise as much as US$3.8 billion.
Shanghai's benchmark stock index has more than doubled this year while Hong Kong's benchmark Hang Seng Index is up 58 percent.
China Railway Engineering has won approval from the State Council for a listing in Hong Kong and Shanghai, and the firm will seek the approval from the Hong Kong stock exchange next week, the sources said.
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