Beijing Capital Group, one of the largest business conglomerates in the Chinese capital, is planning an initial public offering to overseas investors in the second half of next year, a senior company executive said yesterday.

Feng Chunqin, vice-president of the company which has seven listed subsidiaries, did not say how much it plans to raise from the offering, but said proceeds will be used for infrastructure projects including subways and waste water treatment projects, mainly in China's coastal areas, according to Thursday's China Daily.

Some of the infrastructure projects will be used for the 2008 Olympic Games in Beijing, he said.

"Our preliminary target is Hong Kong," Feng said.

"It would be even better if we sell shares in both Hong Kong and New York."

Feng also said the company is considering ushering in strategic investors, but did not elaborate.

Earlier this year, Liu Xiaoguang, president of Beijing Capital, said it had chosen seven strategic investors. Most of them are involved in the finance, real estate and infrastructure industries, but no official agreements had been signed, he said.

Liu also said the group would put up 40 billion shares for the overseas listing, and some of the stakes to be acquired by the first batch of strategic investors will also be floated.

Beijing Capital Group, one of the biggest State-owned enterprises in Beijing, is controlled by the Beijing municipal government.

Its net assets stood at 11 billion yuan (US$1.32 billion) at the end of 2003, compared with 9.57 billion yuan (US$1.16 billion) a year earlier.

The company's net assets grew by more than six times in the eight years since its establishment in 1995, while net profits expanded by more than 25 times, Feng said.

The group has 142 subsidiary companies engaged in six industries including real estate, urban infrastructure, financial services, technology, commerce and tourism and hotels.

Its real estate subsidiary, Beijing Capital Land Ltd, was listed in Hong Kong last June and has ushered in strategic investors such as Singapore's GIC Real Estate Pte Ltd.

Financial services, real estate and urban infrastructure constitute more

than 90 per cent of the group's total assets, Feng said.

(China Daily)