China Railway Construction Corp, the world's seventh largest construction contractor, has been approved as a promoter to establish the China Railway Construction Company Ltd., paving the way for its listing on mainland stock market, the State-owned Assets Supervision and Administration of China revealed yesterday.
China's Company Law stipulates that the promoter for the establishment of a joint stock company must subscribe to all the shares to be issued by the company.
The new company will inherit major assets of the promoter and take project contracts as its core business. Other business includes consultation on survey and design, industrial manufacturing, real estate development, capital operation and logistics.
Chairman Li Guorui was reported earlier this year to have expressed the wish to list the corporation, which is the dominant Chinese firm in the overseas construction market compared with other domestic rivals.
Established 1948, the military troop-turned-corporation registered 150 billion yuan (US$20.1 billion) in turnover last year and was entrusted with a number of well-known projects including the Qinghai-Tibet Railway and the Shanghai Maglev line.
The government has accelerated the listing of large state-owned enterprises mainly in oil and chemicals, telecommunications, transportation and metallurgy industries.
On October 2, SASAC Minister Li Rongrong said the next three years could see the full listing of more eligible centrally administered state-owned enterprises or their main businesses.
In 2006, the total assets of central SOEs hit 12.2 trillion yuan, up 46.5 percent from the figure in 2003. Their revenue stood at 8.3 trillion yuan, up by 85.3 percent.
SASAC, the assets regulator, set up in 2003 to take control of big state companies, has been cutting the number of major SOEs by promoting mergers and acquisitions and allowing poorly performing state firms to go bankrupt.
(Xinhua News Agency November 7, 2007)
