Coal firm plans record Shanghai share sale
Updated: 2007-09-14 15:22
Shenhua Energy, China's largest coal producer, announced that it planned to issue up to 1.8 billion A shares, or 9 percent of its expanded share capital, for a listing in Shanghai, according to today's Oriental Morning Post.
The China Securities Regulatory Commission (CSRC), China's stock regulator, said it will review China Shenhua Energy's plan for an initial public offering (IPO) on the Shanghai Stock Exchange on September 17.
Analysts said the company is expected to raise around 67 billion (US$8.92 billion) yuan from its Shanghai listing, which would be the mainland's largest share sale yet or global largest IPO this year, exceeding China Construction Bank Corp looking to raise up to 55.8 billion yuan with its upcoming IPO.
The company said it will use the proceeds to expand mines, power production, railroads and harbors and to fund acquisitions.
China International Capital Corp and Galaxy Securities are the major underwriters of the Shanghai listing.
Shares of Shenhua Energy in the Hong Kong market jumped more than 5 percent today to a record high of HK$40.60.
The coal producer posted a net profit of 10.32 billion yuan in the first half, up 19.8 percent year-on-year.
China Shenhua Energy raised US$3.6 billion via its Hong Kong listing on June 15, 2005, the world's biggest IPO that year, and was awarded Top IPO 2005 in Asia by Asia Money in 2006.
Analysts said the issue of Shenhua Energy's A-shares will curb the liquidity of A-share market, but will have limited impact on the stock market.
On September 12, Bank of Beijing raised 15 billion yuan in IPO, and CSRC approved China Oilfield Services Ltd's plan to issue up to 820 million A-shares on the Shanghai Stock Exchange and raise as much as 10 billion yuan or more.
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