China Communications slashes IPO size by 75%

Infrastructure and engineering company plans to raise 5 bn yuan of the earlier targeted 20 bn yuan

China Communications Construction Ltd Wednesday said it has cut the size of its initial public offering in Shanghai by 75%, the news reports said.

It is the latest company to have changed its share sale plans in the wake of volatile stock markets. The infrastructure and engineering company is now expecting to raise 5 bn yuan or ($791m, £502m.

Its initial target  was  to raise 20 bn yuan. Last year, the Chinese stock markets fell more than 20% which forced many companies to delay their share sales.

China Communications Construction is listed on the Hong Kong Stock Exchange. Its shares were down more than 5% on the HangSeng index.

The company has cut the amount of shares it plans to issue from 3.5 billion shares to a maximum of 1.6 billion shares.  Of the total shares to be issued, the company will utilise 504 million shares for a share swap  with Road and Bridge International.

The proceeds raised were used to be used for nine projects that includes the repayment of 2 billion yuan worth of bank loans, the purchase of mechanical equipment and the extension of the Guangming Expressway in Gaoming district, Guangzhou. 

The lead underwriters for the IPO are BOC International (China) and Guotai Junan Securities Co Ltd.  Meanwhile, Zhong De Securities, UBS and Goldman Sachs Gao Hua are the joint underwriters.

The IPO will open subscriptions from Feb 14 to Feb 15, the company said in a statement. China Communications Construction Company is an infrastructure and engineering company based in mainland China.

The group is involved in construction and design of transportation infrastructure dredging and port machinery manufacturing business. It is also the largest port construction and design company in China.

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