China Coal Energy, the mainland's second-largest coal mine, plans to raise as much as US$1.69 billion in a Hong Kong initial public offering next month, the International Herald Tribune reported, citing two people with knowledge of the matter. The firm, which began its management roadshow yesterday, is selling 3.25 billion shares at between US$0.41 and US$0.52, representing 28.87% of its enlarged share capital at a valuation of 9.3 to 11.8 times forecast earnings next year, the sources said. The company plans to invest US$1.75 billion between this year and 2008 to expand coal production and trading, according to a November 17 report by Citigroup, which is arranging the share sale alongside China International Capital and Morgan Stanley. China Coal's 50.1 million ton output last year ranked second to the 121 million tons reported by China Shenhua Energy, a Hong Kong-listed company. It is the seventh largest global producer by output.
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