Trade centre to raise US$200m
China World Trade Centre (CWTC), a huge Beijing hotel and commercial complex jointly owned by the Foreign Trade Ministry and Robert Kuok's Shangri-La Asia, is seeking to raise up to US$200 million through an initial public offering in Hong Kong late next year.
The proceeds from the share issue will be mainly used to finance the centre's second phase expansion, which is scheduled for completion in early 1999, costing more than US$100 million.
The complex is one of the fourth batch of Chinese companies slated for overseas listings.
The China Securities Regulatory Commission (CSRC), the country's regulator, had approved CWTC's application, among others in the fourth batch, sources in Beijing said.
A final clearance from the State Council, largely a formality, was expected to be given late this month or next month, they said.
CWTC is China's largest commercial complex, a US$450 million equity joint venture between the Ministry of Foreign Trade and Economic Co-operation (Moftec) and Shangri-La, the hotel group controlled by Mr Kuok, who is also chairman of South China Morning Post (Holdings).
It includes two Shangri-La managed hotels, two residential buildings, one office tower, exhibition halls and shopping arcades.
Located in the centre of Beijing's business district, it commands the highest rental rates in the city.
For the fiscal year of 1995, the rental revenues from office, residential and commercial sectors amounted to HK$668 million, an increase of 47 per cent from $454 million in the previous year.
Officials at CWTC's general office declined to comment on the share issue.
Kuok Khoon Chen, the eldest son of Mr Kuok and a senior executive of the Kuok Group, confirmed last month that CWTC had applied to the CSRC for an overseas listing but said discussions were still going on.
Sources said Moftec was keen to list CWTC in Hong Kong as soon as possible but several hurdles needed to be cleared before the float could proceed.
The major one was that the joint-venture partners had not reached an agreement on how the company should be restructured for the overseas listing.
There are two options under consideration: one is to list the portion held by Moftec and the other is to list the whole venture.
CWTC plans to use the proceeds to build a 38-storey office tower and add about 300,000 sq ft of retail area.
In addition, its luxury five-star China World Hotel is undergoing a US$16 million refurbishment.
Its four-star Traders Hotel is in the process of expanding from 298 to 567 rooms at a cost of US$15 million.
The complex has come a long way since its soft opening soon after the 1989 bloody crackdown on student demonstrations. It was reportedly forced to restructure its loan portfolio as investors stayed away.
In March this year, CWTC paid back the US$280 million construction loan it took out in 1985, three years ahead of schedule.
