Zhengzhou Coal Mining Machinery, the mainland's largest maker of coal mining support equipment has received approval from the Hong Kong stock exchange to list and issue shares that may raise the equivalent of about USD 600 million to fund expansion.

Two people familiar with the deal said that the provincial government-controlled firm based in Zhengzhou, the capital of Henan province, said in a statement to the Shanghai stock exchange late last month that it planned to issue 350 million new shares or a quarter of the 1.4 billion shares it has issued with an option to issue a further 52.5 million shares if demand exceeded the shares on offer.

One of the people said that the timing of the Hong Kong initial public offering of shares is uncertain and depends on market conditions which have been volatile. But it might be before the end of the year. The proposed share offer is being arranged by Deutsche bank, JP Morgan and UBS.

While it is too early to tell what valuation the company may get in the market, it will need to adhere to the China Securities Regulatory Commission's regulations that new shares of mainland listed firms must not be sold overseas at a discount greater than 10% to their valuation on the mainland.

Source - Scmp.com

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