05 August 1995 00:00 [Source: ACN]
JILIN Chemical Industry has set the dates for its long-awaited share offering in New York and Hong Kong and was last week promoting its case by roadshow in Asia and Europe. US roadshows will take place this week.
The Hong Kong issue will open on 15-18 May, and pricing will be set on 19 May but is indicated in the range HK$1.55-1.78/share. This values Jilin at HK1.38bn-1.6bn, which compares favourably with the current HK$1bn valuation of Shanghai Petrochemicals. Trading will start on 22 May in New York and 23 May in Hong Kong.
A total of 893m H shares will be issued, 89.3m in Hong Kong, 357.2m in international offer and 446.5m in the US as ADSs. Following the offering, the state will retain 73% ownership of the company.
Funds raised through the issue will be used to finance Jilin's ambitious expansion plans, central to which is a 300 000 tonne/year cracker and 11 associated downstream plants. The ethylene project is expected to cost Rmb15.2bn, Jilin said.
The company will own the cracker and four of the downstream units which build on existing businesses. It has the option to buy the remaining seven from parent Sinopec. These represent a diversification downstream for Jilin, taking it into new business areas. Three of the four Jilin-owned plants and four of the additional seven facilities are expected to begin production in late 1996, with the remaining four plants starting in 1997.
Existing production units that will be owned by Jilin include the refinery, petrochemical complex and organic rubber plant, chemical fertiliser facility, dyestuff plant and a calcium carbide production unit.
In addition, Sinopec has confirmed to Jilin it has obtained financing commitments to construct and develop a chemical fertiliser production facility. Jilin has an option to purchase the new plant if market conditions make it attractive, and will in any case cease production at its existing plant once the new plant is complete.
Jilin expects net profits this year to be Rmb715m. In 1994, it had net sales of Rmb5.8bn and profits before tax of Rmb795m. Around Rmb5.6bn of sales and Rmb775m of pre-tax profit were attributable to sales within China.
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