JILIN Chemical Industrial Co has picked Merrill Lynch as the global co-ordinator for its impending flotation on the Hong Kong exchange, underscoring the growing trend by Chinese companies to tap the interest of United States players. The Chinese chemical products maker plans an international placement, coupled with a public share offer in Hong Kong which will be sponsored by China Development Finance. Deputy general manager Lu Qirong said Jilin Chemical was also considering the possibility of a secondary listing in the US by depository receipts, given that market's higher stock market liquidity. Ernst and Young was appointed as the accountant. US brokerage houses have been the forerunners in the fierce competition for a slice of the underwriting job for the 22 Chinese state-owned enterprises which are designated for listing abroad, following the first batch. Merrill Lynch is also said to be the sponsor for the listing of Wuhan Iron and Steel, but this has not been confirmed. Other US securities houses, including Goldman Sachs, Morgan Stanley, Lehman Brothers and First Boston are reported to have secured mandates. Mr Lu said Jilin Chemical planned to complete the shareholding restructuring by early June, paving the way for a listing in the third quarter. Mr Lu said the shareholding company, which would be floated on the exchange, would comprise about 10 enterprises that were of higher qualities ''to guarantee the growth of the listed vehicle''. The group's social welfare facilities, such as hospitals and nursing homes, would be hived off, he added. Mr Lu said the shareholding company would have a total workforce of about 30,000, compared with an aggregate 130,000 before the corporate overhaul. He said it would seek to issue a small number of A shares in China.
