Shenhua revives IPO

CHINESE state owned company Shenhua Group has revived plans to sell shares to raise over $US1 in an initial public offering (IPO).

Staff Reporter

Dow Jones & Company reported that Shenhua was meeting with investment banks including Morgan Stanley, Merrill Lynch, Deutsche Bank and Citigroup who are putting forward proposals to Shenhua in an effort to win the right to arrange the share sale.

The offering is expected in the second half of this year, or early 2005 and will offer an alternative to China’s only other coal play, Yanzhou Coal Mining Co whose shares are traded in Hong Kong and the US.

Shenhua Group had earnings of US$266 million (2.2 billion yuan) for the first half of 2003, up nearly 60% from the year earlier, according to the company's Web site. This followed a 34% increase in coal sales to 48.4 million metric tons in the period.

Yanzhou Coal had a target for 2003 to sell 39 million metric tons of coal. It reported a 6% increase in net profit to730 million yuan in the first half of last year, as higher domestic sales volume offset a drop in coal prices.