HONG Kong-listed China Cosco Holdings has received approval to list on the Chinese mainland's stock market, the China Securities Regulatory Commission (CSRC) announced yesterday.
The shipping firm had applied to issue up to 1.78 billion A-shares, or 20 percent of its total shares, on the Shanghai Stock Exchange.
According to the company's prospectus, it plans to raise at least 8.3 billion yuan (US$1.09 billion) from the sale, of which six billion yuan will help buy 12 new vessels for a container-shipping subsidiary.
Another 1.68 billion yuan will be spent buying 51 percent of a logistics company from its own state-owned controlling shareholder.
"The decision was never in doubt," said Niu Yuming, an analyst with Haitong Securities. "It is in line with the commission's strategy of bringing state-owned enterprises back to the Chinese mainland."
The green light for Asia's largest container-shipping line comes as the CSRC is encouraging large state-owned companies listed in Hong Kong or foreign exchanges to return to the mainland stock market.
Last week, an insider from the CSRC referred to China Cosco as a "touchstone" that could be used to gauge the effects of other companies returning to the Chinese mainland.
China Cosco began trading on the main board in Hong Kong on June 30, 2005. Its profits for 2006 fell 64 percent to 2.03 billion yuan. Its shares were listed at HK$9.54 (US1.22) by close of trade yesterday, down by 1.27 percent.