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Coal firm seeks funds to expand
Update: 9/24/2007 1:05:00 PM Source: Shanghai Daily

 

    BEIJING, Sept. 24 -- China Shenhua Energy Co, the nation's largest coal producer, plans to raise 66.6 billion yuan (8.9 billion U.S. dollars) to fund expansion in what may be the nation's biggest share sale this year.

    The company will sell as many as 1.8 billion shares for between 34.99 yuan and 36.99 yuan each, Beijing-based Shenhua said in a statement to the Hong Kong stock exchange yesterday.

    The coal supplier will use the proceeds to expand mines, power production, railroads and harbors, and to fund acquisitions. Shenhua, listed in Hong Kong since 2005, will sell shares to Chinese mainland investors for the first time, tapping the world's best-performing market this year, Bloomberg News said.

    Shares of the company have more than doubled this year, outpacing the 29 percent gain in the benchmark Hang Seng index. The sale may exceed the 7.7 billion dollars China Construction Bank Corp raised from selling nine billion shares.

    Shenhua will use 16.7 billion yuan of the proceeds to invest in 19 coal, power and transport projects, according to a prospectus published on Sept. 13. It will allocate 16 billion yuan to supplement working capital and use the rest for other projects and to buy coal and power assets from its parent.

    Shenhua will spend about 27 billion yuan by the end of 2009 to expand coal production, Chairman Chen Biting said last month. The company has a target of producing 200 million tons of coal a year by the end of the decade and aims to have power output capacity of 20,000 megawatts by then, he said.



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