| Paper firm plans to make first listing in Hong Kong |
BEIJING, March 19 -- Shandong Chenming Paper Holdings Ltd, China mainland's biggest paper maker, plans to raise 3 billion HK dollars(384 million U.S. dollars) by listing shares in Hong Kong for the first time to fund expansion.
If successful, it would be the first Chinese mainland company to have three classes of shares - Class A yuan shares, Class B Hong Kong dollar-denominated shares traded in Shenzhen and so-called H shares listed in Hong Kong. Shareholders will vote on the plan at a meeting to be held on April 1.
Chenming Paper plans to issue up to 25 percent of its total outstanding capital, the company said in a statement to the Shenzhen Stock Exchange on Saturday.
The paper maker had 1.42 billion outstanding shares as of February 28, according to Bloomberg data.
Construction funds
The shares will be priced no lower than 90 percent of the average 20 days closing price before the sale, the statement said.
About 80 percent of the proceeds will be used to fund the construction of production plants, and the reminder to boost working capital, it said.
China's mainland may need up to 70 million tons of paper a year by 2010, an annual increase of about 13 percent, four times faster than the rate in Europe and North America, according to PricewaterhouseCoopers LLC.
The growth prospects have attracted Japan's Oji Paper Co, Singapore's Asia Pulp & Paper Co, South Africa's Sappi Ltd and the world's biggest paper maker, Stora Enso Oyj, based in Finland, to invest in the country.
Chenming Paper, based in the eastern province of Shandong, in July terminated plans to sell a 30 percent controlling stake to CVC Asia Pacific Ltd, a unit of London-based CVC Capital Partners Ltd and New York-based Citigroup Inc, in a 623 million U.S. dollars buyout.
Shares surge
In the first nine months of 2006, Chenming Paper reported profit of 453 million yuan on sales of 8.8 billion yuan.
Its Shenzhen-quoted A-shares have surged 70 percent this year, compared with the 28 percent advance in the benchmark Shanghai & Shenzhen 300 Index.
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