Sichuan Expressway delays Shanghai listing
Adverse stock market conditions have forced Sichuan Expressway to postpone its planned Shanghai listing until next year.
The Hong Kong-listed firm hoped to raise net proceeds of as much as 2 billion yuan (HK$2.27 billion) by issuing up to 500 million A shares.
'Due to recent unfavourable conditions in the mainland stock market, the company is not likely to proceed with the A-share issue on favourable terms before the validity period ends on December 11,' the company said.
Sichuan Expressway had obtained prior approval from the China Securities Regulatory Commission to list in Shanghai before December 11, but if that deadline is not met, the company must reapply for a later listing.
'Although it is the intention of the company to conduct the A-share issue as soon as possible, the exact timing and structure of the issue will depend on market conditions,' said Sichuan Expressway.
The earliest the firm could list in Shanghai was the second quarter of next year, because of the time needed for approvals, procedures and documentation, Richard Lee, an analyst with Core Pacific-Yamaichi, said.
It would not be ideal for Sichuan Expressway to list in Shanghai this year, he said, because the price of its initial offering, which must be at least its book value of 2 yuan, would command a premium of at least 75 per cent to its Hong Kong share price, which was HK$1.29 (1.14 yuan) yesterday.
Part of the proceeds from the Shanghai listing would finance the acquisition of Chengle Expressway in Sichuan province for 1.1 billion yuan, Sichuan Expressway said.
Mr Lee said an A-share listing would be a platform for the company to raise funds to acquire two more expressways in Sichuan, which would cost more than 4 billion yuan.
