Avic I unit to embark on fund-raising exercise before IPO
Jasmine Wang in Beijing
Mainland aircraft maker Avic I Commercial Aircraft plans to raise three billion yuan from foreign investors next year to fund expansion before an overseas listing, according to general manager Luo Ronghuai.
The firm will also spend five billion to six billion yuan from internal resources, taking the total investment to up to nine billion yuan in research and development, and infrastructure construction, Mr Luo said.
He said there was no timetable for the company's initial public offering, which will be the first for a mainland commercial aircraft manufacturer, adding that it may choose to list in the United States.
'Three billion yuan is not a big figure, but it is our first step in tapping the capital market,' Mr Luo said. 'The proceeds from the share offering will be ... much more than that.'
Avic I Commercial, a unit of state-owned China Aviation Industry Corp (Avic I), will handle the pre-sale of the first mainland-made regional jet, the ARJ21.
The company aims to test the turbofan-powered ARJ21, which can carry up to 90 passengers, in March next year and make the first delivery in the third quarter of 2009.
It had secured 71 orders for the jet from domestic carriers, including Shanghai Airlines and Shanghai Electric Leasing, and expected 80 by the end of the year, Mr Luo said, adding that next year the company aimed to sell another 100 jets.
Parent Avic I earlier failed in its bid to buy six Airbus plants in Europe, which Mr Luo said was a result of concern over the mainland's rising power. 'We don't see it as a big setback and will continue to invest overseas or seek international investors with an open mind,' he said.