State Grid may issue mainland IPO
21 August 2006
The larger of China's two power distributors, State Grid Corp, aims to raise US$5 billion in a domestic market offering within two years. The South China Morning Post, quoting people familiar with the situation, said regulators prefer to sell shares in the domestic market first but the company may eventually want an overseas IPO. The listed company would include among its assets distribution networks in China's richer eastern provinces. "The big problem is tariffs, some of the provinces do well and others don't," one source told the newspaper. Authorities have kept power prices down to curb inflation but inefficiencies and economic distortions are leading Beijing to relax controls. Authorities raised energy prices in June for the first time in more than a year.
