Railway firm aims to raise 10b yuan
Mainland rail operator Guangshen Railway plans to tap the market for 10 billion yuan when it launches its A-share listing on the Shanghai Stock Exchange in the fourth quarter of this year, according to market sources.
'The company expects to raise the money to finance its expansion plans, but the details have not yet been announced,' a source said.
Guangshen earlier said that it would sell 2.75 billion A shares, representing 63.43 per cent of the company's issued share capital and 38.81 per cent of its enlarged share capital.
The company is expected to announce the start of its roadshow for the share sale in the near future.
Cash raised from the listing is expected to help fund the planned purchase of the Guangzhou-Pingshi railway project from its controlling shareholder - Guangzhou Railway Group.
'[China Securities Regulatory Commission] has not yet given us a clear timetable for an A-share issue,' the company said.
The company estimates that the planned acquisition from the parent would cost between 9.23 billion yuan and 11.29 billion yuan.
A-share listings have only recently been allowed to resume on the domestic market after a government ban last year as part of reforms to convert all state-owned shares of listed companies into tradeable securities.
Meanwhile, Guangshen yesterday announced a connected transaction in which it sold a 51 per cent equity stake in SZ Civil Engineer to its parent for 35.22 million yuan.
The firm intends to use the sale proceeds for general working capital, according to its announcement on the Hong Kong stock exchange.
Guangshen's net profit rose 8.1 per cent last year to 613 million yuan and its turnover increased 7.9 per cent at 3.28 billion yuan as the company continued to ride on the Pearl River Delta boom.
Its shares closed 2.97 per cent higher at $2.60 yesterday.