Shenhua Group and Tangshan Guofeng Steel hope to take advantage of an industry boom Shenhua Group Corp, China's largest coal producer, and medium-sized steelmaker Tangshan Guofeng Steel plan to raise up to US$2 billion in separate overseas listings, taking advantage of a resources industry boom, according to banking sources. Shenhua, which also operates power plants, railway and port facilities related to the coal business, is seeking to raise US$1.5 billion. It has been meeting foreign bankers this week to discuss a proposal to restructure and float the energy giant in Hong Kong and possibly in another overseas market. The banks included Goldman Sachs, Deutsche Bank, Merrill Lynch, Citigroup and JP Morgan, bankers pitching the deal said. It may take Shenhua four to five weeks to vet the proposals and make a decision. A listing could take place as early as July but was more likely to occur in September or after, they added. The firm will most likely appoint mainland investment bank China International Capital Corp as one of the lead underwriters, while one or two overseas banks may also be selected to lead the deal. The investment banks declined to comment on the deal. Formed in 1995 from the merger of 15 coal firms, Shenhua's annual production volume grew from five million tonnes to about 100 million last year, accounting for about 6.25 per cent of the nation's production. The central government hopes to form five to six coal mining groups with capacity of more than 100 million tonnes each through mergers and acquisitions, to enable the highly fragmented industry to rival its overseas peers. It is understood that Shenhua's listing had been in the planning for several years. In 2001, the state-owned firm took the first step to separate and strengthen its electricity generation portfolio by forming a joint venture with Hong Kong's largest power firm, CLP Holdings. Since then, Shenhua's power flagship Guohua and CLP have been talking about injecting Guohua's power plants into the joint venture, but have come to no conclusion yet. The raw materials boom has also aided Tangshan Guofeng, which aims to raise about US$500 million in the second half before listing on Hong Kong's main board. The steelmaker has appointed JP Morgan as sponsor and sole bookrunner, while Ernst & Young is the company's auditor. Proceeds from the sale would be used to finance expansion of production capacity, said an executive at the Hebei-based company. He said the company ranked about 12th or 13th among domestic steelmakers by capacity, but fifth or sixth in terms of profitability. Tangshan Guofeng was founded in 1993 and is the result of a merger of four steel companies in Tangshan, according to mainland website China Metal Information. The merged steelmaker was 51 per cent controlled by China Travel Services (Holdings) Hong Kong, and 49 per cent owned by the Guofeng municipal government, the executive said. News of the deal comes hot on the heels of another JP Morgan-sponsored offering of fellow Hebei-based China Oriental Group, which owns Jinxi Iron & Steel.