China Railway Materials Commercial Plans Shanghai IPO
2012-01-04 17:32:01
Summary：AChineserailcompanyplanstolaunchaninitialpublicofferinginShanghaiatanunspecifieddateandhopestoreap14.7billionyuan($2.3billion)inpr...
A Chinese rail company plans to launch an initial public offering in Shanghai at an unspecified date and hopes to reap 14.7 billion yuan ($2.3 billion) in proceeds, according to a government filing.
It is unclear when China Railway Materials Commercial Corp. would proceed with an IPO, which could be months or more away, and the move would require further regulatory approval. But the go-ahead offers one more sign that money is again flowing in the direction of China's railway industry after a deadly July crash led to a cash crunch.
Its tentative plan was disclosed on Thursday by China's Ministry of Environmental Protection, which must approve IPO plans by companies whose operations impact the environment. The ministry said the company will use the proceeds to fund 27 projects and supplement working capital.
Based on past IPOs, a China Railway Materials listing won't come anytime soon. Huaibei Mining Co., a large coal miner that went through the environmental-protection process in July, is still in a long line of companies awaiting approval from the securities regulator to launch an IPO.
The ministry earlier Thursday said that Sinochem Corp., a unit of energy-focused Sinochem Group, would also file for an IPO at an unspecified time.
Carved out of China's railway ministry itself, China Railways Materials handles trading businesses for China's giant railroad. It is essentially a logistics business, sourcing, trading and distributing steel for line construction and diesel to power locomotives, as well as food that is served on trains.
Construction on a number of lines was halted in the wake of a deadly high-speed crash in July that raised questions about quality and financial strength of the system. But in recent weeks, the ministry itself has sold bonds and said it had secured new credit lines.
Analysts predict Beijing will continue to expand its already-large and busy railway system, in particular by adding more freight carrying capacity. The Railway Ministry itself is vast. In recent years, a number of businesses involved in producing locomotives, wiring signaling systems and otherwise serving the railway system have been carved out of the ministry and continue to work closely with it.
So far, Beijing has stopped short of radically overhauling the ministry following the July crash, such as splitting its functions as some observers believed might happen.
It is unclear when China Railway Materials Commercial Corp. would proceed with an IPO, which could be months or more away, and the move would require further regulatory approval. But the go-ahead offers one more sign that money is again flowing in the direction of China's railway industry after a deadly July crash led to a cash crunch.
Its tentative plan was disclosed on Thursday by China's Ministry of Environmental Protection, which must approve IPO plans by companies whose operations impact the environment. The ministry said the company will use the proceeds to fund 27 projects and supplement working capital.
Based on past IPOs, a China Railway Materials listing won't come anytime soon. Huaibei Mining Co., a large coal miner that went through the environmental-protection process in July, is still in a long line of companies awaiting approval from the securities regulator to launch an IPO.
The ministry earlier Thursday said that Sinochem Corp., a unit of energy-focused Sinochem Group, would also file for an IPO at an unspecified time.
Carved out of China's railway ministry itself, China Railways Materials handles trading businesses for China's giant railroad. It is essentially a logistics business, sourcing, trading and distributing steel for line construction and diesel to power locomotives, as well as food that is served on trains.
Construction on a number of lines was halted in the wake of a deadly high-speed crash in July that raised questions about quality and financial strength of the system. But in recent weeks, the ministry itself has sold bonds and said it had secured new credit lines.
Analysts predict Beijing will continue to expand its already-large and busy railway system, in particular by adding more freight carrying capacity. The Railway Ministry itself is vast. In recent years, a number of businesses involved in producing locomotives, wiring signaling systems and otherwise serving the railway system have been carved out of the ministry and continue to work closely with it.
So far, Beijing has stopped short of radically overhauling the ministry following the July crash, such as splitting its functions as some observers believed might happen.
Key Words：China,Railway,Materials