China South Locomotive May Sell 30% Stake in IPO
China South Locomotive & Rolling Stock Corp., the nation’s largest maker of rail vehicles, may sell a 30 percent stake in a Shanghai initial public offering to help fund nearly 9 billion yuan ($1.3 billion) of projects, it said in a draft prospectus.
The Beijing-based company plans to offer as many as 3 billion shares in Shanghai, it said in the document posted on the Web site of the China Securities Regulatory Commission late yesterday. The commission’s listing panel will meet June 30 to vet its share sale application, it said in a separate statement.
South Locomotive may also offer as many as 2 billion shares, or a 16.7 percent stake, in Hong Kong, it said in the document. The size of the Hong Kong sale may be boosted to 2.3 billion shares to meet excess demand, it said.
South Locomotive is raising capital for research and to upgrade and expand production as the world’s fourth-largest economy improves its rail system. The country may build more than 7,000 kilometers (4350 miles) of high-speed passenger rail lines in the five years to 2010, which will enable trains to travel above 200 kilometers an hour, the document said.
South Locomotive supplied 47 of the 52 high-speed trains put into use after the country raised national train speed for the sixth time in April 2007, allowing some trains to travel up to 200 kilometers an hour, it added.
The company also exported its products to more than 30 countries worldwide last year, it said in the draft prospectus.
South Locomotive booked profit of 807.4 million yuan last year, a 53 percent increase from 2006, said the document.
China International Capital Corp. and Industrial Securities Co. are managing its Shanghai IPO.
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