Chinese Shipbuilders Plan IPOs

Thursday, November 01, 2007
At least seven Chinese shipbuilders are planning share offerings, underlining China's efforts to build up its domestic fleet and branch out into the construction of more advanced vessels. The largest of the anticipated initial public offerings is likely to come from state-owned China Shipbuilding Industry Corporation (CSIC), which wants to raise about $900m on the Chinese mainland A-share market, according to bankers familiar with the situation. The other major state-owned shipbuilder, China State Shipbuilding Corporation (CSSC), is considering a share sale in Hong Kong. Meanwhile, five privately owned shipbuilders - Jiangsu Rongsheng Heavy Industries, Sinopacific, Mingde Nantong, Yantai Raffles Shipbuilding and JES International - are also looking to sell equity in order to fund their expansion, according to people familiar with the situation. Sinopacific and Mingde confirmed they have IPO plans but declined to give details. Chinese shipbuilders want to raise capital at a time when shipping activity is close to an all-time high. The Baltic Dry Index, a key measure of commodity shipping costs, has more than doubled in the past year. JES will begin its roadshow next week and is set to float in Singapore as early as the end of November, trying to raise as much as $300m from a share sale managed by ABN Amro. Sinopacific is hoping to raise about $660m next year in an IPO managed by Citic. Meanwhile, Rongsheng is reportedly planning to sell as much as 25 per cent of its equity in an IPO. However, Rongsheng is now in talks with private investors about selling a stake ahead of a IPO. Finally, Mingde has selected Deutsche Bank and Morgan Stanley to manage a listing in either Singapore or Hong Kong. The banks involved in the plans would not comment. China recently overtook Korea, the world's leading shipbuilding nation, for the first time in terms of one specific measure - first-half ship orders in terms of deadweight tonnage. CSSC's goal is to double its shipbuilding output over the five years to 2010. [Source:]

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