Chinese railway operator to float shares this year
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China's Beijing-Shanghai High-Speed Railway Co., Ltd. would raise 30 to 50 billion yuan (4.4 to 7.3 billion U.S. dollars) through an initial public offering (IPO) this year, China Daily reported Monday.
The newspaper says, quoting the Ministry of Railways, that the ministry, owner of the 2007 founded company, has submitted the IPO proposal to Ministry of Finance and other relevant government departments.
The IPO has to be approved by the State Council, since the high speed rail is still under construction and the company has not profitted for a continuous three years, according to the ministry.
Liu Sheng, an analyst at Essence Securities, said the IPO would ease the fund raising pressure for the high speed rail project, while the impact on the general market would be largely neutral.
The Ministry-of-Railways-owned China Railway Investment Corp, holding 56.2 percent of the project, planned to shed 4.5 percent stake to raise six million yuan for for more construction projects, the newspaper said.
China started the 1,318-kilometer high speed railway construction project in 2008, and had invested 122.4 billion yuan so far, the newspaper said.
China's investment on railway industry reached 321.8 billion yuan in January, up 73.4 percent year on year, the Ministry of Railways said.
