China shipbuilder set for $1.2b IPO here

YANGZIJIANG Shipbuilding, one of China's biggest shipbuilders, is on track to become Singapore's largest initial public offering (IPO) so far this year.

The company yesterday lodged its preliminary prospectus - a key step in the listing process.

Yangzijiang, based in the coastal province of Jiangsu near Shanghai, expects to raise up to US$800 million (S$1.2 billion). That would make it the largest IPO since brewer Thai Beverage, which raised $1.57 billion last May.

The shipbuilder is already building a new 793,000 sq m yard, to complement its existing 200,000 sq m facility in Jiangyin city - China's No.4 shipyard.

The prospectus disclosed that proceeds from the IPO will be used to partially fund the construction of the new yard, as well as to repay outstanding loans and for working capital.

Its order book stood at 21.58 billion yuan (S$4.3 billion) as at Dec 31, for deliveries between next year and 2010. To date, the company has delivered more than 50 container ships with capacities of between 1,000 and 2,500 standard containers.

Revenue and profit before tax grew from 988.8 million yuan and 170.4 million yuan respectively in 2004, to 2.33 billion yuan and 518.9 million yuan last year.

UBS and DBS Bank are the joint lead managers for the IPO.