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China's top coal producer to issue A shares |
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21:50, July 03, 2007 |
China Shenhua Energy Company Limited (CSECL), China's top coal producer, has announced plans to launch an initial public offering of no more than 1.8 billion A shares on the Shanghai Stock Exchange.
The IPO will increase the company's total stock by 9.05 percent to more than 19 billion shares and reduce the proportion of H shares traded in Hong Kong from 18.8 percent to 17.1 percent.
Investors who buy the yuan-denominated A shares will be treated exactly the same as existing H shareholders, according to a company statement.
The pricing of the shares will depend on market conditions and proposals by the China Security Regulatory Commission. The statement did not specify how much the company hopes to raise through the IPO.
The statement said the funds would be mainly used to build and upgrade coal production, power supply and transportation systems for the company's parent group, to purchase domestic and oversea assets and to replenish the group's capital.
On Tuesday, Shenhua Energy closed at 29.1 HK dollars on the Hong Kong bourse after the weekend announcement of the planned IPO, up 6.6 percent from Friday's close of 27.3 HK dollars.
A report from BOC International estimated the target price of Shenhua's A shares at around 28.5 yuan.
Shenhua Group, the parent group of Shenhua Energy, is a 100 percent state-owned venture created in 1995. Its scope of business ranges from coal, power, heat, coal-liquefied oils, coal-based chemical industries and railways to ports.
Source: Xinhua
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