Citigroup 'hired for Sinotrans IPO'
By Cathy Chan (China Daily)
Updated: 2005-09-14 06:10

By Citigroup Inc, the largest US financial-services firm, has been hired to help manage a planned US$500 million initial public offering by China's biggest airfreight company, bankers involved in the sale said.

China National Foreign Trade Transportation (Group) Corp, or Sinotrans, is planning to sell shares of its dry-bulk business in the first quarter in Hong Kong, said the bankers, who declined to be identified. BOC International (Holdings) Ltd and Credit Suisse First Boston are already working on the sale.

The appointment follows Citigroup's hiring last year of investment banker Wei Christianson, 49. Christianson advised Sinotrans on the US$502 million IPO of its express-delivery businesses in 2003 when she was at CSFB.

"Relationships always matter in winning deals," said Liu Feng, an executive director at Century Securities Co, a brokerage in Shenzhen. "State-owned companies will prefer to hire bankers they know better as it'll help the IPO process."

Richard Tesvich, a spokesman of Citigroup in Hong Kong, and Guo Hongsen, an official at Sinotrans' general office in Beijing, declined to comment.

Investment-banking fees in China, the world's seventh-largest economy, may triple to US$12 billion by 2010, according to estimates from analysts at Merrill Lynch & Co. Citigroup ranks fifth among underwriters of Chinese stock sales this year, up from eighth in 2004, data compiled by Bloomberg show. Chinese companies sold US$13.5 billion of shares this year, 31 per cent of the total in Asia outside Japan.

Shipping companies, including Pacific Basin Shipping Ltd, have increased their fleets to meet the region's growing demand for coal, minerals and other dry-bulk cargo.

China's exports of clothing, computer and other goods rose 33 per cent in the first half of this year. About 80 per cent of global trade is carried by sea.

Sinotrans, which offers freight-forwarding and express-delivery services, reported a 33 per cent increase in first-half profit to 498.7 million yuan (US$61.6 million).

(China Daily 09/14/2005 page11)