Company chooses IPO underwriter By Chen Hong (China Daily) Updated: 2004-03-11 09:52
US financial giant JP Morgan has been selected as the lead underwriter and
global co-ordinator for the overseas IPO (initial public offering) arrangement
of Shenzhen Energy Group, one of the city's largest and most profitable
State-owned enterprises.
This is the first official announcement, made through two local
government-backed newspapers, confirming market speculation that Shenzhen Energy
Group will seek an overseas listing.
The government invited eight strong investment banks and financial
institutions from home and abroad to bid for the project, rather than the widely
accepted one-on-one negotiation, on February 25. The move aims to ensure
transparency, justice and fairness, according to a report by Shenzhen Special
Zone Daily.
The eight big names include Morgan Stanley, JP Morgan, Deutsche Bank AG, BOC
International, Citibank, Goldman Sachs, UBS and China Capital Investment (Group)
Co. The first five accepted the bidding invitation.
JP Morgan won the project in the first round after five of the nine-member
appraisal committee, which was formed by government officials and experts, voted
for the firm.
"We have set the criteria in five areas to decide the winner, such as how
they evaluate the energy group, whether they could attract international
institutional investors faithful to the company, considerations for proper IPO
timing as well as their experiences," an official with the city's reform and
development office was quoted as saying in the report.
Shenzhen Energy, which controls about three-quarters of the city's installed
electricity capacity, is planning an IPO in Hong Kong that could raise about
US$500 million, according to a source close to the company. Its listing could
take place by the end of this year.
It will be the first Hong Kong-listed State-owned enterprise from the city in
the past decade since Shenzhen Expressway's successful IPO in 1994.
Huaneng Power, China's biggest independent power producer, bought 25 per cent
of Shenzhen Energy last year for 2.39 billion yuan (US$288 million) through an
international bidding process. The rest of the company's shares are held by the
local government.
