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COFCO kicks off restructuring
By Lilian Liu (China Daily)
Updated: 2007-03-05 09:28
The magic for which the 48-year-old is best known is the successful spin off of some of China Resources Group's assets, which went on to be listed on the Hong Kong Stock Exchange. That was when he was the chairman of China Resources Enterprises Ltd from 1999 to 2004. Today, Ning is restructuring an even bigger behemoth. But this time, his goal is not to spin off assets. Instead, he wants to list the whole group, which has already listed five units. China National Cereals, Oils and Foodstuffs (COFCO), chaired by Ning, is one of the most active M&A (merger and acquisition) and listing players among mainland companies. Yet all of the restructuring moves, analysts presume, are foresighted preparations for the day COFCO will list the entire group on the bourse. In October, Ning made his first big move since joining the group when COFCO injected HK$5.3 billion worth of assets to its flagship, listed arm in Hong Kong, COFCO International Ltd. These assets include COFOC's prime businesses such as the food and beverage business and the agro-industrial business, which includes biofuel and grain processing operations. Undoubtedly, analysts say, the move is just a prelude to Ning's gradual injection of non-listed assets into public arms before a buyout or another form of group listing takes place. The most effective way to improve the entire group especially the transparency and efficiency of conglomerate companies is listing all subsidiaries. This will also boost investors' confidence. COFCO, the country's largest food trader, vows to be the market leader among group listings. Its subsidiaries COFCO Property, Xinjiang Tunhe, CR Biochemistry and Anhui BBCA Biochemical are now selling shares in the mainland stock market, and COFCO International went public in Hong Kong in 1999. Investors have shown strong interest in all listed arms of COFCO, with Hong Kong-listed COFCO International becoming a heavyweight stock market player attracting attention over the long term. Market-watchers note that COFCO often announces M&A plans and internal group reconstructions. (For more biz stories, please visit Industries)
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Among senior executives of the mainland's 118 national-level State-owned enterprises, Ning Gaoning is celebrated as a wizard of restructuring huge companies with the leverage of the equity market.