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BIZCHINA / Center
Hongshi cements US deal
By Wang Lan (China Daily)
Updated: 2007-09-01 10:01
Privately owned Hongshi Cement Holding Group reached an agreement with
Goldman Sachs on Thursday to sell up to 25 percent, or 600 million yuan
(US$79.5 million), of its shares to the US investment bank.
Ni Yuehui, a senior executive at Hongshi Group, said on Friday that the
transaction is part of the company's plan to seek a mainland listing. But
he said the timetable for the proposed initial public offering is yet to
be decided.
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A market listing would help the company raise new capital to fund future
development, he said, without giving details of the business plan.
Goldman Sachs, a full-service investment banking and securities firm
headquartered in the US, declined to comment on Friday.
Zhejiang-based Hongshi Group is the second-largest cement company and the
sixth-largest cement clinker producer in the province. Its annual
production capacity has expanded from 1 million tons to 16.5 million tons
since it was established in 2002.
With total assets of 3.6 billion yuan, Hongshi controls subsidiaries in
provinces including Zhejiang, Jiangxi and Fujian.
Industry analysts said the deal between Hongshi and Goldman Sachs shows
that the country's booming cement industry has got the attention of
foreign investors. The aggregate output of the cement industry in China
is expected to reach 1.2 billion tons, according to the National
Development and Reform Commission.
Aggregate profits of the cement industry increased 204.83 percent in 2006
from the previous year, according to the National Bureau of Statistics.
(For more biz stories, please visit Industry Updates)
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