China Railway sets December IPO
Updated: 2007-11-08 14:23
China Railway Engineering Group Co Ltd plans to begin Shanghai Stock Exchange trading on December 3 under the name China Railway Co Ltd, initiating the group's overall listing plan, China Business News reported.
Funds raised from the initial public offering (IPO) will be used in purchasing new equipment, building new production lines, and for real estate and railway investment. Together with circulating capital as well as debts to banks, the required funds total 12 billion yuan ($1.61 billion), according to an IPO prospectus the company submitted to the securities watchdog.
The railway giant embarked on price consultation yesterday and is likely to announce its IPO price range on November 20, and the final price will come out on November 23. Online subscription is set for November 21.
According to the company, no more than 1.636 billion shares or 35 percent of total stakes are intended for institutional investors, while the remaining 3.039 billion or 65 percent of total stakes will go to individual investors.
Informed sources disclosed China Railway's H share offering will commence days after its A share issuance. Combined capital raised by the two offerings will come to more than $2 billion. According to its IPO prospectus, the firm intends to issue 3.326 billion shares on the H market for facility procurement.
BOC International Holdings Ltd and UBS Securities Co are the main underwriters for the A stock issuance.
No details were given about how the railway giant will solve the competition between the newly listed company and the subsidiary of China Railway Engineering Group, China Railway NO.2 Engineering Group Co Ltd.
China Railway Co Ltd is totally owned by China Railway Engineering Group Co Ltd, the largest comprehensive construction contractor in Asia and the third largest in the world.
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