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On track toward IPO in HK and Shanghai
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China Railway Group Ltd, the world's third-biggest construction company, plans to raise as much as US$5.5 billion in a Shanghai and Hong Kong initial public offering next month, four people involved in the sale said.


The Beijing-based company, which built the world's highest railway, Qinghai-Tibet line, will sell shares in Shanghai at four yuan (54 US cents) to 4.8 yuan apiece and in Hong Kong at HK$5.03 (65 US cents) to HK$5.78 each, the people said, asking not to be identified before a company announcement.


China Railway is seeking funds to buy equipment, raise capacity and improve technology for the construction of railways, roads and bridges as China plans to spend 5.05 trillion yuan on transport links in the five years to 2010, Bloomberg News said.


PetroChina Co, the nation's largest oil producer, earlier this month almost tripled on its first day of trading in Shanghai, becoming the world's first company to be valued at US$1 trillion.


China Railway's sale is "something that's thematically attractive given China's ambitious plans to develop its railways," said Howard Wang, who manages US$6 billion of China investments at JF Asset Management Ltd.


China Railway plans to list on the Shanghai Stock Exchange on December 3 and in Hong Kong on December 7.


The company will offer 4.68 billion yuan-denominated shares and 3.326 billion Hong Kong shares in the IPO, the people said.


China Railway, set up in September, inherited the core operating assets of China Railway Engineering Corp, the world's third-largest construction company by contract value last year, according to a draft share sale document posted on the Hong Kong stock exchange website.


Infrastructure construction contributed nearly 90 percent of China Railway's revenue of 153.6 billion yuan and 61 percent of its 3.7 billion yuan operating profit last year, said the Hong Kong document.


China Railway's revenue surged 38 percent last year and profit jumped nearly 12-fold to two billion yuan, it said.


(Shanghai Daily November 20, 2007)

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