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China Shipbuilding launches IPO

China Shipbuilding Industry, the country's biggest ship equipment maker, said yesterday it plans to raise around 6.4 billion yuan (US$937 million) in a Shanghai listing to expand production capacity.

China Shipbuilding will issue up to 1.995 billion A shares, or 30 percent of its enlarged share capital, through an initial public offering on the Shanghai Stock Exchange, the state-owned company said in a prospectus filed to the Shanghai bourse.

The company will announce the price range of the offering on December 3. It will start to take institutional subscription on December 4 and retail subscriptions on December 7, according to the prospectus.

The Beijing-based company, a subsidiary of China Shipbuilding Industry Corporation, said it planned to use 6.4 billion yuan to build or expand 22 projects, boosting its capacity to make engines and other parts. The projects will be mainly funded by the proceeds.

The government has called on Chinese vessel equipment producers to increase their production capability to meet the goal that self-made equipment should account for more than 80 percent of the parts used on ships by 2015. Currently, engines and parts rely on supplies from overseas makers such as Japan and Korea. China Shipbuilding said profits last year jumped 51.73 percent to 1.22 billion yuan from a year earlier.

China International Capital Corp has been appointed as the lead underwriter of the stock offering. Forty-five percent of the shares on offer will be earmarked for institutions and the rest for retail investors, the company said.


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