|
The pace at which foreign companies merge and acquire (M&A) Shanghai's State-owned enterprises (SOEs) will be expedited as the city aims to boost profitability of SOEs by taking on overseas partners, a senior city official said.
Shanghai plans in coming years to simplify the application and approval procedures for foreign M&As, said Wu Hongmei, deputy director of Shanghai Municipal State Assets and Equity Administration Office.
The moves are aimed at luring foreign companies to take major stakes in unlisted SOEs and participate in the restructuring of listed SOEs in Shanghai, she said.
Last month, the administration office launched an "expressway" at the Shanghai Assets and Equity Exchange with the Shanghai Foreign Investment Commission to simplify procedures for foreign capital to M&A with State-owned enterprises.
"For M&A projects involving capital of less than US$10 million, the time needed can be shortened from more than half a year before down to one month," Wu said.
More concrete guidelines on the M&A involving foreign participation will be declared soon.
In 2000, the M&A volume of SOEs in Shanghai was 76.8 billion yuan (US$9.3 billion). Only 4 percent of that involved foreign companies.
Many foreign firms hope to enter the Chinese mainland market ahead of the country's expected entry into the World Trade Organization.
As of now, Shanghai's top 38 shareholding companies remain wholly State-owned.
"This is not healthy and makes it difficult for them to establish modern corporate governance systems," Wu said.
But change is afoot. The France-based Danone Group bought a 50 percent stake in Shanghai Aquarius Drinking Water Co Ltd, a subsidiary of Shanghai Maling Aquarius Company Limited.
Another example is French company Michelin Group buying part of the assets of Shanghai Tire and Rubber Company Limited and forming a 70-30 joint venture with Shanghai Warrior Tire and Rubber Company Limited.
Still, foreign M&As are now limited to unlisted SOEs.
"Shanghai is also considering allowing foreign companies to buy stakes into the 90 listed State-owned enterprises," said Wu. "However, it is still being considered."
(China Daily 05/21/2001)
| 
