Sinohydro files for $2.6b Shanghai offering

Sinohydro Group, China’s largest constructor of dams, has filed to raise RMB16.8 billion (US$2.6 billion) in what would be the first major deal on the Shanghai Stock Exchange this year, Reuters reported. Sinohydro said in a statement to the exchange on Sunday that it had set its price range at RMB4.50-4.80 per share, a value that translates to 15-16 times 2010 earnings and is in line with broker expectations. The company, which built the Three Gorges Dam, the world’s largest hydropower project, said it plans to issue up to 3.5 billion A-shares in an effort to raise US$2.7 billion to invest in new equipment, supplement working capital and fund four new projects, including one in Cambodia. This year has seen mostly smaller offerings on the Shanghai Exchange; however, mainland IPO markets remain relatively active, despite a 13% drop in the benchmarket Shanghai Composite Index this year.