China Construction Co. Limited, the country’s biggest real estate developer, was approved on Thursday by China’s securities regulator for the second initial public offering [IPO] this year.
The company will issue 12 billion A-shares and it’s expected to raise more than 40 billion yuan (5.71 billion U.S. dollar).
The first IPO approval was granted to China Railway Construction Corporation Limited [CRCC] on Jan. 23, one of the nation’s largest road project contractors, with an issuance of 2.8 billion shares.
According to China Construction Co. Limited pre-release prospectus, the raised capital will be used to fund big construction projects, infrastructure investment, commercial housing development and machinery equipment purchase.
As a heavyweight in construction and land development, the company made its name by building the National Aquatics Center, the Central China Television headquarter and the Shanghai Financial World Center, the highest skyscraper in China’s mainland.
Following an industry reshuffle, the company was reorganized at the end of last year by the parent company of China State Construction Engineering Corporation [CSCEC] which hold up to 94 percent of the shares. PetroChina, Baosteel and Sinochem Corporation accounted for 2 percent each.
Sales revenue of the group totaled 168.3 billion yuan last year, up 26.4 percent from a year ago. Net profit earned by the parent company reached 4.92 billion yuan in 2007, up 103.9 percent year on year.
China International Capital Corporation will lead the underwriting, according to the prospectus.