Shanxi Coal expected to sell A shares before seeking listing in HK
Shanxi Coal Transportation and Sale, the mainland's biggest coal distributor, might delay its US$1 billion Hong Kong initial public offering in order to list first in the domestic market as early as next year, sources said.
Last year, the coal company hired Bear Stearns for its Hong Kong offering, which was scheduled for this year. Now, it might terminate the contract with the troubled investment bank and could hire Citic Securities for its A-share offering, a person working on the deal said.
'The restructuring of the company is far from finished,' said a second source looking at the transaction. 'The A-share IPO won't come until June next year, or even later.'
He said the new bookrunner had not been fixed yet.
The company could not be reached for comment.
The loss of the Shanxi Coal offering would be a further blow to Bear Stearns, which had been trying to build its business in Asia. Last week, it reported that profits plunged 62 per cent in the third quarter due in large measure to the United States subprime loan meltdown.
Bear Stearns, which until recently had not had an Asian head, appointed John Moore as chief executive for Asia in August in a move seen as showing its commitment to Asia.
Shanxi Coal was set up this year by its holding company, Shanxi Coal Transportation and Sales Group. The parent injected it with coal production, processing, distribution and sales assets, as well as chemical businesses, according to the company's website and a report by the Taiyuan Evening News, in April.
Shanxi Coal is based in Taiyuan, the capital of a province that accounts for 33 per cent of the nation's proven coal reserves. The parent is engaged in producing coal, coal products and coke transport and sales. It also has coal import and export licences.
Formerly known as Shanxi Province Coal Transportation and Sale General Co, the parent started restructuring and injecting the assets to enable the Hong Kong offering, China Business News said in June.
The company had expected to raise US$1 billion from the Hong Kong listing and was talking to strategic investors, according to the report.
Six companies had agreed to take stakes in the coal company with total investments worth about 250 million yuan, the report said.
The company owns 92 mines with annual production capacity of 27.86 million tonnes, and has a large number of coal processing and conversion enterprises, plus other business entities, according to the company's website.
It also owns 253 coal-transport railway stations and 264 highway coke business stations, among other assets.
The company won approval from the State Council in May to establish a national-level coal trading centre in Taiyuan, liberalising one of the last remaining commodities whose price is still under state control.