China's Largest Coal Producer and Steelmaker Plan Major Listings to Tap Resources Boom

China's Shenhua Group Corp, the country's largest coal producer, and medium-sized steelmaker Tangshan Guofeng Steel are gearing up to raise billions of dollars in separate overseas listings, capitalizing on the current resources industry boom. The two companies are taking advantage of strong demand for coal and steel, driven by China's economic growth and infrastructure development. Shenhua is seeking to raise up to US$1.5 billion in a Hong Kong and possibly an overseas listing, while Tangshan Guofeng aims to raise about US$500 million in the second half before listing on Hong Kong's main board.

Key Takeaways:

• Shenhua Group Corp, China's largest coal producer, is seeking to raise up to US$1.5 billion in a Hong Kong and possibly an overseas listing.
• The company has been meeting foreign bankers to discuss a proposal to restructure and float the energy giant in Hong Kong and possibly in another overseas market.
• The banks involved in the deal include Goldman Sachs, Deutsche Bank, Merrill Lynch, Citigroup, and JP Morgan.
• Shenhua's annual production volume grew from five million tonnes to about 100 million last year, accounting for about 6.25% of the nation's production.
• The central government hopes to form five to six coal mining groups with capacity of more than 100 million tonnes each through mergers and acquisitions.
• Tangshan Guofeng Steel, a medium-sized steelmaker, is planning to raise about US$500 million in the second half before listing on Hong Kong's main board.
• The steelmaker has appointed JP Morgan as sponsor and sole bookrunner, while Ernst & Young is the company's auditor.
• Proceeds from the sale would be used to finance expansion of production capacity, according to an executive at the Hebei-based company.
• Tangshan Guofeng was founded in 1993 and is the result of a merger of four steel companies in Tangshan.

Statistics:

• Shenhua's annual production volume grew from five million tonnes to about 100 million last year, accounting for about 6.25% of the nation's production.
• The central government hopes to form five to six coal mining groups with capacity of more than 100 million tonnes each through mergers and acquisitions.
• Shenhua plans to raise up to US$1.5 billion in a Hong Kong and possibly an overseas listing.
• Tangshan Guofeng aims to raise about US$500 million in the second half before listing on Hong Kong's main board.
• China Oriental Group, another Hebei-based company, has also announced plans to raise capital through a listing.

Sources:

• "Bei Hu and Denise Tsang, Shenhua Group Corp, China's largest coal producer, to raise up to US$1.5 billion in Hong Kong and possibly overseas listing" - Shenhua Group Corp, China's largest coal producer, to raise up to US$1.5 billion in Hong Kong and possibly overseas listing, according to banking sources.
• "Eric Ng in Beijing, Bei Hu and Denise Tsang Shenhua Group Corp, China's largest coal producer, and medium-sized steelmaker Tangshan Guofeng Steel plan to raise up to US$2 billion in separate overseas listings" - Eric Ng in Beijing, Bei Hu and Denise Tsang Shenhua Group Corp, China's largest coal producer, and medium-sized steelmaker Tangshan Guofeng Steel plan to raise up to US$2 billion in separate overseas listings, according to banking sources.
• "Tangshan Guofeng Steel, a medium-sized steelmaker, to raise about US$500 million in the second half before listing on Hong Kong's main board" - Tangshan Guofeng Steel, a medium-sized steelmaker, to raise about US$500 million in the second half before listing on Hong Kong's main board.