HONG KONG (AFX-ASIA) – Shanghai Electric Group, China’s largest power and industrial equipment maker, has appointed CSFB and Guotai Junan Securities to prepare it for a Hong Kong listing, the South China Morning Post reported, citing unnamed market sources.
The sources said CSFB and Guotai Junan will advise on the restructuring of Shanghai Electric, which has assets of 80 billion yuan in 207 subsidiaries and 128 ventures with foreign firms. (US$1=8.27 yuan).
“CSFB and Guotai Junan will most likely be the underwriters but the mandate has not been given, and it is not known whether other banks will be invited to join,” a source said, adding about 6 billion yuan worth of assets were estimated to be included in the listing.
Ahead of the listing, targeted for late this year, the firm plans to introduce strategic shareholders, including power generation companies, and foreign partners to bolster its credibility to investors.
“They plan to invite local firms such as power generators and some privately held business partners and customers to invest in them,” a source said. “Hopefully, that can be completed in the first quarter. The next step is to introduce the likes of GE, Siemens and ABB as foreign strategic investors.”
The group makes power generators, electrical and mechanical equipment (such as industrial refrigerating systems and elevators), environmental protection equipment and transport equipment, which together account for more than half of its sales, the report said.
Separately, China Power International Holding Ltd (CPI), a unit of one of the mainland’s largest power firms, is planning a listing in Hong Kong in July or August to raise between US$500 million to US$1 billion, the China Daily reported.
The report, which quoted an industry source, said the company hammered out the listing proposal two weeks ago and is currently selecting investment banks to advise it on the listing.
The report said at least five investment banks are pitching for the deal, including Citigroup, Credit Suisse First Boston, Deustche Bank, Merrill Lynch and UBS.
CPI is a Hong Kong-registered subsidiary of the China Power Investment Group, one of the five largest power companies set up by the Chinese government after an industry reform last year.