CSCEC gets IPO approval

China State Construction Engineering Corporation (CSCEC) has been granted approval to float on the Shanghai stock exchange with an initial public offering (IPO) of 12 billion shares. The issue, which represents 40% of the company's capital, is expected to raise more than CNY 40 billion (US$ 5.85 billion). It will be China's fifth largest IPO ever.

CSCEC is one of China's three largest construction companies, and one of the world's ten largest . In 2007 it had revenues of CNY 150 billion (US$ 19.8 billion) in 2007 and made an operating profit of CNY 9.4 billion (US$ 1.2 billion). According to the prospectus issued for the IPO, its sales rose +20% last year to CNY 202 billion (US$ 29.1 billion), while operating profit fell to CNY 6.7 billion (US$ 965 million). It employs more than 98000 people.

The company says it will use the proceeds to finance residential building projects, infrastructure schemes, equipment purchases and for general working capital.

CSCEC is due to start the ‘book building' process - establishing the demand and price for the IPO - this week, following the granting of regulatory approval last Friday (10 July). The IPO itself is expected to go ahead some time in August.