Sinosteel gearing up for IPO by taking eco friendly evaluation

June 1, 2008

June 1st (Steel Guru) – Interfax China reported that Sinosteel is currently having its environmental credentials assessed so that it can apply to the China Securities Regulatory Commission to execute its planned initial public offering.

Mr Huang Tianwen president of Sinosteel Group confirmed the company’s current activities to Interfax, but said that no final timetable for listing has yet been settled.

The report added that the environmental evaluation conducted under a Ministry of Environmental Protection program is a necessary step companies must take before applying to the CSRC to IPO on the domestic stock market.

The MEP, formerly known as the State Environmental Protection Administration has already approved Sinosteel’s initial environmental protection qualifications, after reviewing the environmental impact of Sinosteel’s 16 subsidiaries and 26 IPO fund financed projects involved in heavily polluting industries such as mining, ferroalloy, refractory materials and roller manufacture. However, before it can obtain full MEP approval, Sinosteel must pass a 10 day period in which members of the public can comment on and evaluate the company’s environmental performance. This period of public evaluation for Sinosteel commenced on May 20th 2008.

Mr Wang Qiang analyst with Industrial Securities said “As previously reported by Shanghai Securities News, the Sinosteel A-share IPO is estimated to raise between CNY 10 billion and CNY 20 billion. In this case, Sinosteel would have to wait until the second half of this year, when the A-share market will have becomes strong enough to accept such a huge IPO.”

Mr Wang said “As a large scale state enterprise, Sinosteel has been paying much attention to environmental protection issues, so the eco-friendly evaluation shouldn’t be an obstacle for its IPO. He said that the MEP approval should be regarded as a milestone in Sinosteel’s IPO preparations because it has caused a lot of trouble for ferrous and nonferrous miners and smelters in the past.”

Some 26 projects are to be financed with funds raised through the planned IPO, including Sinosteel’s acquisition of prospecting rights to an iron ore deposit in Anhui Province, an 80,000 tonnes ferronickel facility and a 5 million tonne iron ore fine processing and storage project in Hebei Province, a special ferroalloy production base in Jilin Province and various machinery manufacturing projects.

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