Coal Firm Raises CapitalYanzhou Coal Mining Company Ltd, the largest coal producer in East China, is expected to issue an additional 100 million A shares to purchase the nation's largest coal mine -- Jining-3 in Shandong Province.The shares will be issued on January 3 on the Shanghai Stock Exchange. Forty per cent of the shares will be placed with institutional investors and the rest with individual investors. Analysts said the company planned to raise 1 billion yuan (US$120 million). The raised funds will go towards the US$310 million mine purchase deal to be finalized on January 1. The rest will be paid by the company's retained cash and bank loans. According to Yang Deyu, general manager of the company, the Jining-3 coal mine boasts an annual production capacity of 5 million tons of coal. It is expected to register a profit of 200 million yuan (US$24 million) in 2002 and 300 million yuan (US$36.1 million) in 2003. "The coal mine has the lowest production costs in the world and will greatly hone our company's competitive edge," Yang said. The coal conglomerate, established in 1997, posted a net profit of 372 million yuan (US$44.8 million) with earnings per share of 0.143 yuan (1.7 US cents) in its interim report in August, ranking it first among domestic coal companies. The company was listed on stock markets in New York, Hong Kong and Shanghai simultaneously in 1998. The new share issue coincides with the rebound of the sluggish domestic coal industry, triggered by strong exports and the State's efforts to shut down small, inefficient mines. This year coal production is estimated to decrease 30 per cent from 1.37 billion tons to 950 million tons. Coal prices have risen from 137.8 yuan (US$16.6) per ton in February to 141.2 yuan (US$17) this month. "These moves have eased a coal glut on the domestic market and provided a better market for our company," Yang said. (China Daily) |
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