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| SOE Seeks Public Listing for Restructuring |
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China's steel giant Baoshan Iron & Steel Co. Ltd will go public soon, a move which is expected to raise at least 7 billion yuan (US$ 843 million) for the company.
This represents as the largest listing ever in China's security market.
Observers say that the reform of restructuring State-owned enterprises (SOEs) by means of a shareholding system has achieved a breakthrough and seeking public listing will become a major means for SOEs' restructuring
Liu Dongsheng, deputy director of the Enterprise Reform Department under the State Economic and Trade Commission (SETC), said that the shareholding system has seen the greatest progress in the reforms of China's SOEs this year.
"The government encourages SOEs to go public to realize a diversified investment structure and establish a modern enterprise system," he added.
"China has a group of giant SOEs that have the potential to go public both at home and abroad. More will join at the right time and at a faster pace," he noted.
Baoshan Iron and Steel is to make an initial public offering ( IPO) of 1.877 billion shares, with the per share price initially set at between 3.5-4.18 yuan.
After the IPO, the company will have a total of 12.5 billion shares, making it the largest listed company in China.
"The listing will greatly promote the company's development and expansion, help us improve the existing modern enterprise system as well as overall efficiency," said Xie Qihua, general manager of the company.
According to Xie, the company has an ambitious plan: in five-year's time, Baoshan will develop into the most competitive steel company in the world.
Authoritative sources disclose that apart from Baoshan, a number of giant SOEs, including the China National Offshore Oil Corp. (CNOOC) Ltd. and China Telecom, are also preparing to go public.
Overseas capital has become another important strategy for raising funds for Chinese SOEs.
Earlier this year, PetroChina Company Ltd, China Unicom Ltd. and China National Petrochemical Co. Ltd. (Sinopec), successfully listed on overseas securities markets.
The three giants raised a combined capital of over US$ 12 billion.
China put forward the goal of "strategically restructuring SOEs " at the 4th Plenary Session of the 15th CPC Central Committee. Since then, the scale of SOE's listing became larger and SOEs' restructuring model became more "mature," said analysts.
They noted that most of the listed SOEs on the domestic or overseas stock markets are state key enterprises in crucial industries.
"Whether these companies will transform themselves into internationally competitive giants after China's entry into the World Trade Organization has great bearing on China's future," they added.
To accomplish the new goal of SOE reforms in the Five-Year Period (2001- 2005), the SETC and related departments have begun drafting plans to guide SOE's restructuring for the next five years.
(Xinhua 11/12/2000)
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