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China COSCO Prices Shanghai Offer at 7.60-8.48 Yuan

China COSCO Holdings, the flagship company of the country's premier shipping group, said on Friday it had priced its Shanghai A-share offer between 7.60 yuan and 8.48 yuan.

China COSCO will issue 1.784 billion A shares, or 20% of its expanded share capital, it said in a statement published on the exchange's Web site, the maximum number of shares outlined in its original offer plan.

The offer could raise as much as 15.13 billion yuan ($2 billion) at the top of the price range, making it the seventh-largest initial public equity offer on the mainland's Shanghai and Shenzhen stock exchanges.

The range represented a price-earnings ratio of 88.43 to 98.67 times the company's 2006 earnings, based on its enlarged share capital after the Shanghai offer, the statement said.

It would also put China COSCO's Shanghai IPO price at a steep discount to its Hong Kong-listed H shares, which ended at HK$9.64 on Thursday, although domestic A shares in Chinese firms typically assume a hefty premium over their H shares after their listing.

China COSCO would issue up to 30% of the shares to strategic investors, 25% to institutions and the rest to retail investors, although the retail portion may be expanded if demand is strong, it said in the statement.

Proceeds from the offering would be used to buy a 51% stake in sister firm COSCO Logistics for 1.68 billion yuan and to pay for 12 ships still being built at a total cost of 6 billion yuan, among other investments, it said earlier in an IPO prospectus.

Many overseas-listed Chinese companies are returning to the domestic bourses, with official encouragement.

Bank of Communications, partly owned by HSBC Holdings, raised 25.2 billion yuan in April in China's fourth-biggest domestic public offer and listed in Shanghai last month.