China's regulator prefers power firm sell its first shares in the domestic market
State Grid Corp, the larger of China's two power distributors, is planning to raise at least US$5 billion in an initial public offering in 2008, people familiar with the situation said.
Distribution networks in China's wealthiest eastern provinces will provide most, if not all, of the listed company's assets, sources said.
'The company is talking to banks now about ideas to get in the best position for an IPO in 2008,' one source said. 'The big problem is the tariffs - some of the provinces do well and others don't, so it's a matter of structuring.'
Beijing has kept a firm grip on power prices in an attempt to curb inflation.
However, energy price controls have led to economic distortions and inefficiencies, prompting the government to begin to relax its tight control.