China Coal Energy Co, the nation's second-largest coal producer by sales, won approval from the Chinese regulator to raise funds in Shanghai for mine expansion.
China Coal said its plan to sell as many as 1.53 billion yuan-denominated A shares was approved by the China Securities Regulatory Commission on Saturday, according to a statement to the Hong Kong stock exchange yesterday. The sale represented 11.51 percent of its total shares, it said.
The coal producer will use the proceeds to expand mines and develop chemicals projects to meet rising demand in the country. China burns coal to generate about 78 percent of its electricity, Bloomberg News said.
Price range of shares offered will be determined after market consultation from today to Wednesday while the final price is expected to be announced on January 29, according to an updated A-share prospectus. Shares will start trading in Shanghai on February 1.
China Coal has surged fivefold in the past year in Hong Kong, making it the third-best performer in the 48-member MSCI Asia Pacific Energy Index. The stock jumped 5.2 percent to HK$23.45 (US$3) last Friday.
The company plans to spend 21.2 billion yuan (US$2.9 billion) on two coal and chemicals projects in the Inner Mongolia Autonomous Region and Heilongjiang Province, it said on January 7.
China Coal's profit for 2007 was no less than 6.01 billion yuan under international accounting standards, it said. That's 90 percent more than the 3.17 billion yuan a year earlier.
(Shanghai Daily January 21, 2008)