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Guangshen Railway Plans Issue of A Shares
China's Guangshen Railway Co said Thursday, December 7, that it proposed to issue up to 550 million A shares - mainland-listed shares reserved for domestic investors - to raise about 1.98 billion yuan (US$237.6 million) to expand its railroad.
The company said in a statement it intended to apply to the China Securities Regulatory Commission to issue the shares to institutional and public investors on the mainland, and it proposed to list the shares on the Shanghai stock exchange.
The firm operates Guangshen Railway, the sole railroad between Guangzhou and Shenzhen. It also participates in train services between the mainland and Hong Kong.
The company said it would use the net proceeds from the proposed share issue to finance the construction of a fourth track of Guangshen Railway, whose total construction costs were estimated to be around 3.6 billion yuan (US$434.7 million).
"The shortfall will be funded by the existing internal resources of the company or bank loans," the statement said.
The proposed issue would represent 18.9 per cent of the total issued State-owned domestic shares of the company.
"The issue price will be set according to the price-to-earnings ratio valuation method and will be determined by conducting a book-building process," the enterprise said.
Upon completion, the 139.96-kilometre fourth track would run between Guangzhou and Pinghu in southern China.
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