U.S. News

China Coal Plans to Issue $2.85 Billion A Shares in Shanghai


China Coal Energy said it would issue up to 1.525 billion class-A shares in a public offering of shares in Shanghai, raising funds to develop major coal related projects in China.

The A shares could be worth up to HK$22.23 billion (US$2.85 billion), based on the company's Hong Kong share price of HK$14.58 on Friday, according to Reuters calculations.

The company said in a weekend statement that the A-share issue, which is subject to shareholders' and relevant authorities' approval, would represent 11.51% of the enlarged share capital.

The issue price range and final offer size of the A-share issue will be determined based on prevailing conditions in the Chinese securities market.

The Chinese coal producer said the net proceeds would be used to invest in coal, methanol and coke production projects including the Erdos Project, Heilongjiang Project, Phase II of the China Coal and Coke Xuyang Limited Engineering Project, and the Shanxi Lingshi Project.

Proceeds will also be used to invest in a coal gangue generated electricity project China Coal Shuozhou Great Power Project, the company added, but it gave no investment detail.

Shares of China Coal have jumped almost three-fold so far in 2007 to close at HK$14.58 on Friday.