China's steel giant Baoshan Iron Steel Co. Ltd. will soon go public in the largest listing ever on the country's securities market, state media reported Saturday.
The listing is expected to raise at least 7 billion yuan (843 million US dollars), said the China Daily, which did not give a timetable.
The paper also cited informed sources as saying a number of other giant state-owned companies (SOEs), including China National Offshore Oil Corp. Ltd. and China Telecom, were also preparing to go public.
Baoshan is to make an initial public offering (IPO) of 1.877 billion shares, with an initial share price of between 3.50 and 4.18 yuan (0.40 to 0.50 dollars).
The company will have a total of 12.5 billion shares after the IPO, which will make it the largest listed company in China.
"The listing will greatly promote the company's development and expansion and help us improve the existing modern corporate system as well as overall efficiency," said company general manager Xie Qihua.
The listing is part of a nationwide drive to shape up lumbering SOEs and prepare them for international competition after China joins the World Trade Organization (WTO), expected in a few months.
Going public is seen as a good strategy to raise much-needed funds to invest in upgrading the companies and transforming them into internationally competitive enterprises.
Earlier this year, PetroChina Company Ltd., China Unicom Ltd., and China National Petrochemical Co. Ltd. successfully listed on overseas stock markets, raising a combined capital of more than 12 billion dollars.
But skeptics have voiced concerns that money raised by publicly listed SOEs could be misused to pay compensation to laid-off workers or mismanaged by incompetent managers.
China is one of the biggest steel producers in the world, but its steel suffers from poor quality and, as a result, low exports.
Low demand and low prices brought profits for large and medium-sized steel firms sliding to 2.5 billion yuan (301 million dollars) last year, down from a record high of 29.4 billion yuan (3.5 billion dollars) in 1993, state media had said.
But large steel makers have reversed the money-losing trend this year, it said.
As part of efforts to become more efficient and competitive, China's steel sector is planning to layoff 200,000 employees by 2002, with the number of workers directly engaged in steel production reduced from more than one million to 800,000.
The government will reduce tariffs on steel imports by 2.5 percent and remove other barriers within five years after it joins the WTO -- BEIJING (AFP)
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