Baosteel Group, China's largest steelmaker, has started laying the groundwork for its long-awaited overseas listing by engaging in talks with financial intermediaries, industry sources said.
While for years the company had been receiving overseas listing proposals, this time was 'a little bit different' as Baosteel recently made clear that it planned to float shares outside the mainland by 2010, a source said.
The sources said Baosteel would list in Hong Kong and possibly in New York too, but no time frame or fund-raising target had been set.
It is likely to be a direct listing of the group's Shanghai-listed arm, Baoshan Iron & Steel, which controls almost all its steel assets.
A report by Reuters yesterday said Baosteel's top management had decided to list core steel assets in New York in November to raise more than US$1 billion and had launched an international search for accountants and lawyers to help it meet US listing standards.
A spokesman for Baosteel's Shanghai unit said he was not aware that the company or its parent firm had begun searching for accountants and lawyers. He said the group had always been studying an appropriate time to list abroad.
Tiger Huang Weihua, a consultant at industry advisory Hatch who has met Baosteel officials, said the company had for years had regular exchanges with investment banks and consultants on the merits of an overseas listing.
'My impression is that they are not keen on such a move in the short term, despite having been approached by global investment banks for a long time,' he said. 'I think their priority is to do more domestic mergers and acquisitions to strengthen themselves after the Arcelor-Mittal mega merger.'
Baosteel had formed alliances with domestic steelmakers including Magang (Group) and Xinjiang Ba Yi Iron & Steel Group and intended to merge with them 'when conditions are ripe', company executives said earlier.