Yunnan, UBS in deal to package toll-road venture for flotation

The Yunnan provincial government will sign a letter of intent with the Union Bank of Switzerland to set up a toll-road joint venture to be listed in Hong Kong and China next year.

Communications department deputy director Jin Fuxiang said the venture, which comprises four existing toll roads, would be re-packaged for the flotation.

'UBS will invest US$150 million to $200 million for a 30 per cent stake, while Yunnan will hold a 67 per cent interest by contributing four toll roads,' he said.

A Hong Kong company would take 3 per cent.

The four roads measure 530 km, with an asset value of more than two billion yuan (about HK$1.85 billion).

Mr Jin said China's securities watchdog had assigned a quota to Yunnan to float a toll-road company on the domestic market and the department planned to apply for a Hong Kong listing at the same time.

Yunnan plans to invest 20 billion to 30 billion yuan during the five-year period from 1996 to 2000 to improve its road network, half of which will come from foreign funding. The province had invested a combined eight billion yuan last year and this year.