Three heavy-industry groups hope to raise at least two billion yuan here because of the state of the mainland's markets Three Chongqing-based heavy-industry companies are planning to list in Hong Kong to raise combined proceeds of at least two billion yuan, according to the city's deputy mayor Huang Qifan. At an investment conference to promote the city's enterprises in Hong Kong, Mr Huang said Chongqing Changan Automobile, which has A and B shares, was seeking to raise funds in Hong Kong. He said the depressed conditions of the mainland's share market had prompted the city's companies to seek listings in Hong Kong, and about 14 had met the minimum listing requirements. Chongqing Changan yesterday signed a framework agreement with Citigroup, under which the American investment bank would advise the carmaker on its overseas fund-raising venture. Chairman Yin Jiaxu said last month the firm was in the process of selecting an investment bank to help it secure an overseas listing status. It hopes to become the first mainland company to have A, B and H shares in issue, but this will be subject to approval by the China Securities Regulatory Commission. The sharp rise in H shares this year has narrowed their valuation gap compared with A and B shares, greatly improving the lure of an H-share issuance. Previously, any issuance of Hong Kong-traded H shares at a lower valuation than mainland-traded A and B shares risked rejection by A-shareholders as they feared their interests would be diluted. Trading of A shares are largely restricted to domestic investors with limited foreign institutional participation only permitted earlier this year. H shares are restricted to foreign investors. Chongqing Changan is China's second-largest mini-vehicle maker with a 29.8 per cent share of the national market last year. In addition to major capacity expansion plans in several of its facilities, it has pledged to inject US$500 million by 2005 towards a mainland car joint venture with Ford of the United States to boost annual capacity from 20,000 units to 150,000. It hopes to produce 1.5 million cars a year by 2010. Production in this year's first nine months reached 299,000 units. Meanwhile, privately controlled Chongqing Minsheng Gas also signed an agreement yesterday to appoint Tai Fook Securities as its sponsor for a Hong Kong listing. The firm, which distributes natural gas, liquefied petroleum gas and natural gas chemicals, has a 1.2 billion yuan investment plan which aims to complete a pipeline network covering 24 cities in Hunan, Hubei and Guizhou provinces and Chongqing city. Chongqing Dongsheng Aluminium Industry hopes to raise 400 million yuan through a listing to help fund four projects.