Top Biz News
IPO sells shares to investors
Updated: 2006-07-22 15:28
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The first Chinese railway to be listed on the mainland stock market on Friday started to sell shares. Daqin Railway Co. is expected to raise 15-billion-yuan (1.87 billion U.S. dollars).
The company started selling the first tranche of shares at 4.95 yuan (62 U.S. cents) to private investors.
The company's IPO of 3.03 billion shares will be the second highest in Chinese stock market history after the Bank of China, which raised 20 billion yuan on the sale of six billion A-shares.
Daqin will release 1.06 billion shares, or 35 percent, on to the Shanghai Stock Exchange, with another 1.06 billion shares sold to institutional investors.
The company's 12 strategic investors, including insurers, fund companies, a port group, an energy group and other big investors will split the remaining 0.91 billion shares.
However, a spokesman for the Shanghai Stock Exchange said Friday that the exact date of the stock market offering was still under consideration by the China Securities Regulatory Commission (CSRC).
Jiang Yong, investment manager of China International Capital Corp Ltd. (CICC), Daqin's share dealer, said 230 institutions had applied for the 1.06 billion shares earlier this week.
The listing is expected to launch a period of major expansion for Daqin, which has announced plans to buy new rolling stock and expand its carrying capacity.
It also intends to purchase the the major coal lines of Fengtai (West)-Shacheng-Datong and Datong-Ningwu, both of which it already manages.
Daqin operates the main coal shipping railway in northern China. The 1,000-km line linking Datong City in coal-rich Shanxi Province and the port city of Qinhuangdao, in Hebei Province, is expected to handle 250 million tons this year.
Railway experts said more railway companies would follow the Daqin model by listing to raise capital for construction.
Four other mainland companies, including Hengdiandongci, Baoli Property, Tianyuan Science and Technology, and Weiertai also launched their IPOs this week.
Their shares will be sold on both of China's bourses, the Shanghai Stock Exchange and the Shenzhen Stock Exchange.
These IPO approvals came after the China Securities Regulatory Commission in June approved the application by the Bank of China, the country's second biggest bank, to go public in Shanghai.