Sinotrans, China's largest transport company, plans to integrate dozens of its smaller subsidiaries into two listed firms by 2010 as it prepares to list bulker operator Sinotrans Shipping in a Hong Kong initial public offering later this month.
The IPO could be worth up to US$1.69 billion.
Sinotrans vice-president Zhang Jianwei said the second-tier companies would be merged into Sinotrans Shipping and its existing Hong Kong-listed company, Sinotrans.
Zhang said integrated logistics and container liner businesses would be assimilated into Sinotrans, while Sinotrans Shipping would become the group's bulk shipping flagship.
The move will help boost the total turnover of the Sinotrans Group to $10 billion by 2010.
Sinotrans Shipping has prices its offer at 12 to 14 times the firm's 2008 earning forecast of $300 million. Trading in the shares will start on November 23. The offer has already been well received after seven cornerstone investors subscribed for a total of $175 million worth of shares.
These include Li Ka-shing, one of Asia's richest men and chairman of Hutchison Whampao, which controls leading port operator Hutchison Port Holdings.
Other key investors are three Chinese shipping and port giants - China Cosco Group, China Shipping Group and China Merchants Group ¨C together with Ping An Insurance, Lee Shau-kee, chairman of Henderson Land Development, and hedge fund Citadel Investment Group.
Sinotrans Shipping, which was founded in Hong Kong in February 2003, has 26 bulk carriers, three single-hulled very large crude carriers and five small container vessels in its fleet.
The firm said proceeds from the IPO will be used to expand its fleet and acquire shipping companies, repay bank loans and replenish its working capital.
Industry analysts said the company plans to increase its dry bulk shipping capacity by 13.5 percent by 2009 and its oil and container shipping capacity by 37.2 percent this year.
|
