China State Construction IPO to see up to 12bn shares issued

14 July 2009 10:39  [Source: ICIS news]

SHANGHAI (ICIS news)--China State Construction Engineering Corp's plans to issue as many as 12bn shares worth yuan (CNY) 40.5bn ($5.92bn) would likely be the world’s largest initial public offering (IPO) this year, an analyst said on Tuesday.

The company, China’s largest construction firm, announced the plans in a prospectus released to the Shanghai Stock Exchange on 13 July.

The money raised would help fund new housing developments, infrastructure projects, the purchase of mechanical equipment and to supplement liquid capital, according to the prospectus.

This was likely to be the largest IPO in the world this year, according to analyst Xie Wenjie, who covers the construction industry with Shanghai-based AJ Securities.

"The issue price will be between CNY3.5-4.0," said Xie.

Investors could apply to purchase the shares on 21-22 July, according to the prospectus.

The prospectus named China International Capital Corp as the lead underwriter of the offering.

The company’s stock code is 601668, and it would be listed on the Shanghai Stock Exchange around late July or early August, Xie said.

Chinese herbal lozenges producer Guilin Sanjin Pharmaceutical Co became China’s first IPO to be listed on the Shenzhen Stock Exchange on 10 July after a nine-month IPO moratorium from September 2008.

The China Securities Regulatory Commission stopped allowing IPOs from September of last year after the stock market had plunged sharply from the beginning of 2008.

China’s key Shanghai Composite Index has gained more than 70% to reach above 3,100 points since the beginning of the year.

($1 = CNY6.84)

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By: Judith Wang
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