Beijing firm enhances IPO efforts
By Sun Min (China Daily)
Updated: 2004-04-13 09:00

Beijing Capital Group has chosen seven overseas strategic investors to enhance its strength prior to its planned overseas listing in the next few years, said group president Liu Xiaoguang.

They are expected to acquire 10 billion shares that will be placed by Beijing Capital Group as part of its capital expansion.

"All the seven investors are big overseas companies that do comprehensive investments," Liu told China Daily on Saturday.

They come from Europe, the United States, Japan, Hong Kong and Taiwan. Most of them are involved in the finance and infrastructure sectors, including a few real estate investment companies, he said.

If things run smoothly, they are expected to complete the acquisition in the next 12 months or so. By then, overseas investors would hold as much as a 50 per cent stake in the Beijing company.

"But we have not signed any agreements on the final deals so far, so there may be changes," Liu said, adding that the group would choose the best investors.

Already with four listed subsidiaries and controlling two listed funds, Beijing Capital Group is also seeking an overall group listing in overseas markets in the next two to three years.

Liu said the group would put together 40 billion shares for the overseas listing. Some of the stakes to be acquired by the first batch of strategic investors will also be floated.

The overseas listing market, however, is not set yet - possible choices are Hong Kong, New York and London, he said.

The proceeds raised would be used in various businesses in which the group is involved in, including real estate, finance, infrastructure, water, and highway construction, among others.

There has been a trend for domestic enterprises to seek overseas strategic partners and capital when they have developed to a certain scale, experts said.

That will also urge the enterprises to operate according to international standards and in greater transparency.

Beijing Capital Group, one of the biggest State-owned enterprises in the Chinese capital, is controlled by the Beijing municipal government. Its net assets were close to 12 billion yuan (US$1.46 billion) by the end of 2003, compared to 9.57 billion yuan (US$1.16 billion) a year ago, group sources said.

Its real estate subsidiary, Beijing Capital Land Ltd, was listed in Hong Kong last June and has absorbed strategic investors like Singapore's GIC Real Estate Pte Ltd, which has already jointly undertaken two luxurious housing projects in Beijing.

The subsidiary is now planning a 1.2 billion A-share listing.

Real estate is estimated to account for 30 per cent of Beijing Capital Group's revenue and is one of its core businesses.

Apart from real estate, another of the group's flagships is Beijing Capital Co Ltd, an A-share company in the water and utilities business.

"We have signed nine contracts concerning water plants across the country this year," said Liu. "There are still more than a dozen to be inked this year."

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