Huaibei Coal gets ready for Shanghai listing
0 Comment(s)
Print
E-mail
China Daily, July 27, 2011
Huaibei Mining Group Co Ltd, one of the 13 national coal production bases in China, said it will complete its domestic initial public offering to raise 8.5 billion yuan ($1.3 billion) by the end of 2011.
The company plans to sell 2.2 billion shares on the Shanghai Stock Exchange. It will use the money to fund two coal preparation plants and a project to upgrade excavation equipment.
Shao Hua, assistant to the general manager of the company, said they have submitted the necessary documents are awaiting government approval of the IPO.
"The IPO process will take longer than we expected because of the preparation of documents for the Ministry of Environmental Protection," Shao said.
Chinese mining companies now need to get approval from both the environmental watchdog and the securities regulator for their IPOs.
"I am confident in the final outcome of our listing because we are doing well in production, sales and management," said Wang Mingsheng, president of the company. However, he declined to disclose details about the share pricing.
Wang told China Daily that the company doesn't plan to invest in foreign coal mines in the next five years even after the completion of the IPO.
"Honestly, we have tried to expand our business abroad. I researched possibilities in Indonesia, Mongolia and Australia, but the regulations and political environments are very different from those in China. Doing business abroad is still hard for us."
However, because of the decreasing coal resources in Anhui province, where the company is located, Huaibei Mining has been working on developing new coal mines outside the province.
The company will explore up to 5.8 billion tons of coal resources at the Shaanxi Fugu Gucheng coal mine in Shaanxi province and Nalin river in Erdos, in the Inner Mongolia autonomous region, cooperating with Shaanxi Fugu Gucheng Great Wall Building Co and Chery Automobile Co Ltd.
During the 12th Five-Year Plan (2011-2015) period, the company will reach an annual coal production capacity of 50 million tons outside Anhui province.
The company will have 50 million tons of coal output by the end of 2015 when sales income will reach 60 billion yuan, said Zhang Anming, senior economic engineer at the company. Chinese media reported earlier that Huaibei Mining will face difficulties in its IPO because of its high debt ratio and growing number of its retired employees.
Zhang responded to the report by insisting that the unhealthy assets are not included in the IPO and the company doesn't have any problem in terms of its retired staff.
Go to Forum >>0 Comment(s)