China announced Friday that it will resume issuing initial public offerings (IPOs), which it suspended four months ago, according to China Securities Regulatory Commission.
Huadian Power International Co. will be the first company on the Chinese mainland to go public in 2005, an official with the commission said.
Huadian Power is controlled by China Huadian Group Corp., a state-owned energy giant with assets totaling 89 billion yuan (US$10.8 billion) at the end of 2003.
It will be the first IPO to be affected by China's IPOs pricing inquiry regulations, which became effective on January 1, 2005, said the official, who declined to be named.
Huadian will make public its IPO plan on January 17 and China International Capital Corp. will act as the major underwriter of Huadian shares, said the official.
The official said the commission is approving another company to go public before the week-long holiday of Chinese New Year, which falls on February 9.
The commission made public the draft of the pricing inquiry regulations on August 30, 2004, and no IPOs have been offered since then.
The pricing regulation is one of the major efforts made by the securities watchdog to strengthen institutional arrangement for the country's securities market.
Under the new regulations firms planning to launch IPOs will have to inquire about share prices among institutional investors. The final IPO price will be decided by the result of the inquiry. Stock issuers and sponsors must then evaluate the prices.
The new system is supposed to give investors more say in the pricing process and better protect investors' interests by presenting more financial information of the listing applicants.
In the past, there were complaints that many IPOs were overpriced and not transparent.
(Xinhua News Agency January 15, 2005)
