By Yvonne Lee and Joanne Chiu
HONG KONG–China International Marine Containers (Group) Co. has
received approval from the Hong Kong stock exchange to list in
the city, a person familiar with the transaction said Friday, as
the state-owned container producer shifts its listing from
Shanghai’s flagging B share market.
If successful, the Shenzhen-based company will become the first
Chinese company to convert its shares from the so-called Class B
share market to Hong Kong-listed H shares that are denominated in
Hong Kong dollars.
China’s Class B share market–where companies are denominated in
U.S. dollars–was once the only access point for foreign
investors seeking investments in Chinese listed shares, but China
has slowly opened up to international capital and allowed
investments in the more liquid yuan-denominated A-share market.
There have been few B-share initial public offerings since 2001.
CIMC has both A and B shares, and is now planning to list in Hong
Kong and convert its B shares to Hong Kong-listed shares,
according to the person familiar with the transaction. It will be
listing in Hong Kong from Dec. 19 onwards through “introduction”,
so it won’t raise funds.
In August, CIMC, the world’s largest maker of containers by
output, said it is seeking permission to convert its 1.43 billion
Shenzhen-listed B shares-valued at about 13.38 billion Hong Kong
dollars (US$1.7 billion)-into Hong Kong-listed stock by way of
introduction.
The state-run company wants to move because extremely slow trade
in its B shares has hurt their value. A Hong Kong listing will
help internationalize its business, too.
The Hong Kong benchmark Hang Seng Index is up 19% so far this
year, compared with China’s B share market, which is down 1.4%.
The container producer declined to comment but said in a
statement earlier Friday that the last trading session of its B
shares is expected to be Nov. 29 if it receives clearance from
the Hong Kong stock exchange.
CIMC, which counts Hong Kong’s blue-chip port operators China
Merchants Holdings (International) Co. (0144.HK) and Cosco
Pacific Ltd. (1199.HK) as major shareholders, posted a 52%
decline in its net profit for the January-September period, as a
result of lower container prices and sales amid the global
shipping downturn.
CIMC said in August it will offer a cash option for shareholders
who reject the conversion listing and will buy back their shares
at HK$9.83 each.
The company has 2.66 billion outstanding shares, including 1.23
billion yuan-denominated A shares, which have traded on the
Shenzhen Stock Exchange since 1994.
-Amy Li in Shanghai contributed to this article
Write to Yvonne Lee at yvonne.lee@wsj.com and Joanne
Chiu at Joanne.chiu@wsj.com
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