Shanghai B-Share Market Reopens To New Offerings
Shanggong Co. Ltd., a Chinese maker of industrial sewing
machines, has received permission to offer shares on the
hard currency B-shares market in a private equity sale.
The company is already listed on Shanghai's A-share and
B-share markets.
The announcement marks the end of a three-year moratorium
on new offerings on the two B-share markets on China's
mainland, which was put into place when the China Securities
Regulatory Commission was considering a possible merger
between the US-dollar-denominated B-share markets and
yuan-denominated A shares.
The last new share offering was in October 2000, when
apparel manufacturer Guangdong Rieys Co Ltd netted HK$142.8
million (US$18.31 million) from its initial public offering
of 60 million B shares on the Shenzhen stock market.
The government deregulated the country's B-share markets
in Shanghai and Shenzhen in early 2001, allowing private
domestic investors to trade in the former foreign-investor-only
market and causing a subsequent upsurge in prices.
The government hopes that this move to inject activity
into the B-share market will bring other companies to
consider the B-share market to raise capital, and lessen
pressure to revalue the yuan.
Shanggong said that it expects to raise no more than
US$50 million from the sale of 100 million B shares to
14 pre-selected overseas institutions, such as FAG of
Germany and Shanghai Industrial Asset Management (Hong
Kong) Co Ltd.
The 14 new investors would not be allowed to sell the
new shares for at least six months.
Shanggong said it would use the proceeds to buy 81.1
percent of Durkopp Adler AG, a German sewing machine manufacturer,
and build new workshops using technology obtained from
the German company.
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