China Railway Group Ltd, the world's third-biggest construction
company, plans to raise as much as US$5.5 billion in a Shanghai and
Hong Kong initial public offering next month, four people involved
in the sale said.
The Beijing-based company, which built the world's highest
railway, Qinghai-Tibet line, will sell shares in Shanghai at four
yuan (54 US cents) to 4.8 yuan apiece and in Hong Kong at HK$5.03
(65 US cents) to HK$5.78 each, the people said, asking not to be
identified before a company announcement.
China Railway is seeking funds to buy equipment, raise capacity
and improve technology for the construction of railways, roads and
bridges as China plans to spend 5.05 trillion yuan on transport
links in the five years to 2010, Bloomberg News said.
PetroChina Co, the nation's largest oil producer, earlier this
month almost tripled on its first day of trading in Shanghai,
becoming the world's first company to be valued at US$1
trillion.
China Railway's sale is "something that's thematically
attractive given China's ambitious plans to develop its railways,"
said Howard Wang, who manages US$6 billion of China investments at
JF Asset Management Ltd.
China Railway plans to list on the Shanghai Stock Exchange on
December 3 and in Hong Kong on December 7.
The company will offer 4.68 billion yuan-denominated shares and
3.326 billion Hong Kong shares in the IPO, the people said.
China Railway, set up in September, inherited the core operating
assets of China Railway Engineering Corp, the world's third-largest
construction company by contract value last year, according to a
draft share sale document posted on the Hong Kong stock exchange
website.
Infrastructure construction contributed nearly 90 percent of
China Railway's revenue of 153.6 billion yuan and 61 percent of its
3.7 billion yuan operating profit last year, said the Hong Kong
document.
China Railway's revenue surged 38 percent last year and profit
jumped nearly 12-fold to two billion yuan, it said.
(Shanghai Daily November 20, 2007)
