Anglo to invest in China

ALONG with five other strategic investors, Anglo American plans to buy a large holding of Shenhua Energy Company when it goes public June 15.

Staff Reporter

Shenhua will list its shares on the Hong Kong Stock Exchange on June 15 to raise between $US2.9 billion and $US3.6 billion in the world's largest initial public offering (IPO) this year.

The UK-based group plans to buy $US150 million of the shares with the other five investors expected to subscribe $US650 million to the international offer.

Over and above the share deal, Shenhua and Anglo are in talks to form a co-operative arrangement related to coal mining.

Chairman of Anglo's coal mining Tony Redman said Anglo had been actively pursuing a strategy of developing a China-based coal business, according to Dow Jones Chinese Financial Wire.

“The investment in Shenhua further strengthens Anglo Coal's China strategy,” he said.

Redman said the deal was attractive because Shenhua was the largest coal producer in China and the fifth largest in the world, based on its 2004 production.

Meanwhile, Shenhua confirmed Wednesday it was in talks with Anglo American saying given Anglo’s opencut mining experience and Shenhua’s underground mining experience, the two sides could cooperate.

The other strategic investors are: Lee Shau Kee, the chairman of Henderson Land Development.; a direct investment fund of Bank of China; Chow Tai Fook, owned by New World Development’s chairman Yu-tung Cheng; CITIC Pacific; and Kerry Group, controlled by Malaysian tycoon Kuok Hok Nien.

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