China’s CSCEC to raise world’s biggest IPO this year
21 Jul 2009
China's largest home builder, China State Construction Engineering Corp (CSCEC), plans to raise $7.34 billion through a share sale, said to be the world's biggest initial public offering this year after Brazil's VisaNet raised $4.27 billion on the São Paulo stock exchange last month.
Though it has not yet finalised a date for listing its shares, China State Construction's proposed IPO is substantially larger than the $1.26 billion raised by China's Zhongwang Holdings in April.
It will also be the largest in China after Beijing-based PetroChina raised $8.94 billion in October 2007, and would be China's fourth-largest till date.
In a statement filed with the Shanghai Stock Exchange, the company said that it would offer yuan-denominated 12 billion A shares at 3.96 yuan to 4.18 yuan per share, which would yield 50.1 billion yuan or $7.3 billion to the company if all shares were to be sold at the highest price.
The massive IPO will boost the growing confidence of Chinese investors after China ended a nine-month-long moratorium for new listings last month, in the aftermath of the over 65-per cent decline in China's stock market due to the global economic downturn.
The size of the IPO also reflects the company's confidence in being able to raise $7.34 billion from the Chinese market although it had initially planned to raise $6.3 billion. Its confidence also soared after the public offer of Guilin Sanjin Pharmaceutical, a small drug manufacturing company, was subscribed 584 times. Guilin Sanjin was the first company to sell shares after the nine-month-long moratorium was lifted.
