Marine Log - October 2008 - (Page 39)

COVERSTORY purpose, but we want to make Rongsheng a real international company,” he said. Another Chinese shipbuilder with IPO plans is New Century Shipbuilding Co Ltd., the country’s largest private shipyard, is planning to list its shares in Singapore this year to raise up to $1.5 billion, according to Chairman Yuan Kaifei. Yuan told reporters the firm would use the proceeds from the 5-10 billion yuan ($724 million-$1.5 billion) initial public offering to improve its engineering technology and expand production capacity. New Century has chosen to list in Singapore because the city-state is a global maritime hub and the market has a deep understanding of the shipbuilding industry, he said. Both Rongsheng and New Century appear to be taking their time with their IPO’s. In fact, they may be getting cold feet in light of developments with Singapore-listed Yangzijiang Holdings which had a successful Singapore IPO last year, but has since started a share buyback program after share price underperformance caused it to be dropped from the Straits Times Index . If the market for international IPO’s turns sour, China is quite capable of generating the funds for shipbuilding internally. The only questions are about the mechanics of delivery. As we’ve seen with CSIC, one way is through corporate bonds. Another is through the injection of private equity. The city of Tianjin has ambitions to become a center for private equity funds. In 2006, the State Council approved Tianjin Binhai New Area to serve as a sort of incubator for financing reform and innovation where any significant reform of financial enterprises, businesses and markets can first be tested in Tianjin Binhai New Area. In June, Tianjin lodged an application with China’s State Council to raise a $2.89 billion (RMB20 billion) shipbuilding fund, China Business News reported. “Our shipbuilding fund will have two modes,” vice mayor Cui Jindu told the newspaper. “One is equity investment and the other leasing, which is similar.” In August, the National Development and Reform Commission approved Tianjin’s application to prepare its shipping industrial fund. Tianjin says the fund will fuel the financing system for China’s shipbuilding industry, and facilitate the formation of international shipping and logistic centers. ML www.marinelog.com OCTOBER 2008 MARINE LOG 39 http://www.mcallistertowing.com http://www.mcallistertowing.com http://www.mmcintl.com http://www.mmcintl.com http://www.marinelog.com

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Marine Log - October 2008 Contents Editorial Second Thoughts Update Inside Washington Fresh Fuel Ferries Exhibitors Preview Ferries get "Smarter" China's Great Ambitions Newsmakers Tech News Contracts Events Website Directory ML Buyer's Guide ML Marketplace Shipbuilding History

Marine Log - October 2008

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