China State Construction signals biggest IPO in 2009

One month after China’s government lifted a moratorium on mainland initial public offerings, state -controlled China State Construction and Engineering Corporation is preparing a flotation worth $5.9 billion.

China’s largest construction company and general contractor, China State Construction and Engineering Corporation, is planning to raise more than $5.9 billion in what would be the biggest initial public offering globally of the year so far.

The company obtained regulatory approval to list on the Shanghai Stock Exchange late on Friday and intimated that it would invest the proceeds of the equity raising in both real estate and infrastructure investments.

If achieved, the IPO would tower over the $4.27 billion IPO by VisaNet, a financial institutions network, in Brazil earlier in the year.

The deal would also be the latest in a string of public offerings to occur in China since the government lifted a nine-month ban on public capital raisings last month.

China State Construction plans to issue as many as 12 billion RMB-denominated A shares. The company will embark on a road show to garner interest in the stock before opening to subscriptions between 22-23 July. China International Capital Corporation is to underwrite the placement.

As well as real estate and infrastructure construction and investment China State Construction also operates planning, design, equipment leasing, advisory and facilities management services businesses.

The state-owned company, which was founded in 1982, had assets under management valued at RMB 74.1 billion ($10.45 billion; €7.6 billion) by June 2002, according to company figures.