Top Biz News
Sinosteel gets IPO ball rolling again
By Zhang Qi (China Daily)
Updated: 2010-01-21 07:56
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Steel trader expects to complete public float formalities by March
Sinosteel Corp has set the ball rolling for an initial public offering (IPO) of its shares on the domestic bourses this year even as the steel trader looks to expand its global footprint further, said Huang Tianwen, president of the company.
The State-owned firm expects to file the IPO documents before March and get all the required approvals by June, said Huang.
"Our plan is to list the shares on the A-market this year itself," he said.
Sinosteel, which has two listed units under its umbrella, had earlier planned to raise $1.5 billion through an IPO, media reports said. It was also reported that the company was looking at listing its shares on the Shanghai and Hong Kong bourses. The proposal got delayed for various reasons and has now been refurbished, said sources.
Huang, however, did not indicate the amount the company plans to raise through the IPO or where its shares would be listed eventually.
Sinosteel officials said the group would inject 95 percent of its assets into its shareholding firm, a platform established in 2008 for the public float.
As part of this plan, Sinosteel will transfer its mining, carbon, refractory, ferroalloys and equipment manufacture units to the shareholding firm.
Huang said Sinosteel is expected to report a better performance this year thanks to the better industrial climate. That confidence also stems from efforts that the company would take to diversify its business mix and strengthen resource exploration. The company saw its revenue reached 155.2 billion yuan last year.
But for now, Sinosteel is betting big on expanding its overseas footprint. Huang exuded confidence when he said, "going forward we expect overseas business to account for nearly 50 percent of the total sales pie".
Sinosteel also intends to set up manufacturing bases in overseas locations, given the fact that the domestic market is nearly saturated.
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In recent times, Chinese companies have been shopping for overseas mining firms to bolster their raw material supplies and also reduce their dependence on giant miners like Rio Tinto, BHP and Vale for iron ore.
Sinosteel was among the first few Chinese firms that went abroad for resources. In the 1990s, it acquired a 40 percent stake in the Channar iron ore mine in Australia. The company also made a successful $1.36 billion bid for Australian mining company Midwest a couple of years back and the venture started its first shipment of iron ore in December 2009.
