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SCMP Reporter

Shenyang, in Liaoning, will see a wave of 'backdoor listings' under an initiative to restructure its 15 A-share listed companies.

 The restructuring programme is part of an overall reform of state-owned enterprises in Liaoning's old industrial city.

 'The restructuring proposals [for the 15 A-share companies] are expected to be ready by the year end and for completion next year, otherwise we would not be able to fulfil [Executive] Vice-Premier Zhu Rongji's expectations to take the state sector out of its predicament,' said Zhou Hang, deputy director of the Shenyang Economic Restructuring and Reform Commission.

 Included in the programme were Jinbei Automotives, Shenyang Chemical and Northeast Pharmaceutical.

 The firms have been working on their plans with help from the Economic Restructuring and Reform Commission, Economic and Trade Commission and Securities and Regulatory Commission.

 'The majority of the 15 A-share companies from Shenyang have been posting dismal performance. It is hoped that they could live up to investors' expectations through restructuring,' Mr Zhou said.

 The restructuring would involve the disposal of non-performing assets and mergers and acquisitions.

 'We could use the shell of these companies for the indirect listings of some quality assets in the city,' Mr Zhou said, adding the issue of shares on the stock market was a desirable low-cost financing method.

 The city government would soon introduce policies on the formation of groups and mergers and acquisitions to facilitate the restructuring moves. They might include measures to relieve the interest burden of state-owned enterprises.

 Mr Zhou said the companies were responsible for raising funds to acquire and merge with other enterprises.

 The city has 355 large and medium-sized enterprises but only 15 of them were listed, raising about three billion yuan (about HK$2.78 billion).



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Liaoning province

Liaoning state-owned enterprises set for backdoor listing