China's Shaanxi Coal Industry plans $2.7 billion IPO

Fri Aug 26, 2011

SHANGHAI (Reuters) - Shaanxi Coal Industry plans an initial public offering in Shanghai to raise up to 17.3 billion yuan ($2.7 billion) in what could be China's biggest IPO this year.

The China Securities Regulatory Commission (CSRC) said late on Thursday that it would review Shaanxi Coal's IPO application on August 29.

Shaanxi Coal would issue up to 2 billion shares in the offering, according to a draft prospectus posted on the CSRC website.

A successful IPO would make the company the country's third-largest publicly traded coal miner by output after China Shenhua Energy Co Ltd (1088.HK)(601088.SS) and China Coal Energy Co Ltd (1898.HK)(601898.SS), Shaanxi Coal said, adding that the proceeds would fund mining activity and replenish working capital.

It would also be the biggest IPO in the mainland market this year, surpassing Sinohydro Group Ltd's planned $2.5 billion offering.

China's IPO market slowed by a fifth in the first half, lacking the big deals of the year before, with fundraising dominated by smaller companies.

In the first six months, only about a tenth of the companies seeking listings chose to do so on the Shanghai Stock Exchange, with the rest going to the smaller Shenzhen bourse, which houses the Nasdaq-style ChiNext market, Thomson Reuters data showed.

State-owned Shaanxi Coal and Chemical Industry Group Co Ltd SHAANB.UL owns 71 percent of Shaanxi Coal.

China is the world's biggest coal-producing country, with output at 3 billion tonnes in 2009, accounting for about 46 percent of total global production that year.

Shaanxi Coal is headquartered in Xi'an, in the northern Chinese province of Shaanxi, which had known coal reserves of about 170 billion tonnes, the company said.

CICC, BOC International (China) Ltd and Citic Securities are joint underwriters of the IPO.
($1 = 6.390 yuan) (sourced Reuters)