Shenhua Group, China's largest coal producer, is considering launching its initial public offering worth up to US$1.5 billion simultaneously on stock exchanges in Shanghai and Hong Kong, sources familiar with the situation said yesterday.

While companies with listings on the mainland and Hong Kong are common, none has ever launched an IPO on both exchanges at the same time.

"They are considering it, but nothing is finalized," one source said. Shenhua has short-listed investment banks Merrill Lynch, Deutsche Bank and China International Capital Corp to manage its initial public offering in Hong Kong and possibly New York, sources said.

The coal mining firm hopes to complete its listing in the fourth quarter of 2004.

"No one has tried this before. I could imagine the complexity," another person familiar with the deal said.

The closest any firm has come to a simultaneous Hong Kong and mainland IPO was top Chinese beer maker Tsingtao Brewery.

Tsingtao became the first mainland firm to list in Hong Kong, in July 1993, and listed in the mainland a month later.

China Construction Bank, one of the mainland's "Big Four" lenders, also hopes to list its shares simultaneously on exchanges in Hong Kong, the United States and the mainland. The bank aims to raise US$5-10 billion late this year or in 2005.

State-owned Shenhua Group Corp was set up in 1995 with 2.58 billion yuan (US$311 million) in registered capital.

The firm owns the Shenfu Dongsheng coalfield, China's largest, in Inner Mongolia and Shaanxi province.

It also owns a railway to carry the coal, as well as a coal terminal and shipping fleet.

(HK Edition 06/30/2004 page17)