| Capital Securities seeks back-door listing |
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issue time:2007-03-10 08:12
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Jan. 26, 2007 (China Knowledge) – Capital Securities, a Beijing-based brokerage, is seeking to become a publicly traded company by paying more than RMB 2 billion to take over the Shanghai-listed Chengdu Qian Feng Electronics <600733>.
An announcement issued to the Shanghai Stock Exchange said that Beijing Capital, the largest shareholder of Capital Securities, will acquire optical-fibre maker Qian Feng by swapping assets, which will go along with the reform of Qian Feng's share structure from non-tradable state-owned shares to tradable equity.
Qian Feng's assets will then be transferred to Capital Securities’ major shareholder Sichuan New Tech Digital Equipment, which will hand over its holdings in Qian Feng to Beijing Capital.
After the transfer, Beijing Capital will become the new company’s largest shareholder with a 37.02% stake. The new company will be renamed Capital Securities Ltd.
For Mainland brokerages, back-door listings have become a popular and potentially profitable alternative to IPO after the end of a long bear market and a long period of lax regulations that caused many brokerages to incur high debts.
Brokerages waiting for the China Securities Regulatory Commission's final approval for a back-door listing include GF Securities, Dongbei Securities, Changjiang Securities and Haitong Securities.
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