Red-chip candidate Beijing Enterprises Holdings, controlled by the Beijing municipal government, yesterday dismissed fears it would encounter difficulties buying assets from its parent. The company hopes to raise more than $1.2 billion from an issue of 150 million shares this month priced at between $8.00 and $9.30 a share. The issue is expected to be well received by the market, buoyed by expectations the mainland parent will inject assets into its newly listed arm. Asset injections into red chips - which have driven share prices in the sector up in recent months - encountered difficulties recently when the China Securities Regulatory Commission indicated it wanted to step up its regulation of red chips. 'There is a need to strengthen the regulation of red chips,' Beijing executive deputy mayor Jin Renqing said. 'The objective of regulating red chips is not to stifle their growth but to better regulate them so that they can develop steadily.' He said he had not heard any reports that the central government had expressed concerns about the overheated red-chip sector. 'I think red chips play an important role in the development of the Chinese economy, especially large state-owned enterprises, and the prosperity and stability of the Hong Kong stock market,' Mr Jin said. Beijing Enterprises would be Beijing's only listed conglomerate in Hong Kong. Its H-share hopeful Beijing North Star Co, the property development arm of the Beijing municipal government, would concentrate on the property sector. The international roadshow for the Beijing Enterprises flotation started yesterday. The public offer in Hong Kong will begin on May 20, closing on May 28. Trading in the shares is expected to start on May 29. Company chairman Hu Zhaoguang would probably quit as Beijing's vice-mayor next year, allowing him to concentrate on development of the company, Mr Jin said. Although it was against Chinese policy to have government officials assuming positions in commercial enterprises, Mr Hu had received permission from Beijing allowing to wear both hats, he said.