China CRRC to raise up to $1.8b in private share sale

The country’s only manufacturer of high-speed locomotives plans to raise as much as 12 billion yuan (U.S. $1.8 billion) in a private share sale in Shanghai to repay debt and to help finance its daily operations.    CRRC Corp., China’s only maker of high-speed locomotives, plans to raise as much as 12 billion yuan ($1.8 billion) in a private share sale in Shanghai to repay debt and to help finance its daily operations.
   The company’s board has approved the sale of as many as 1.39 billion yuan-denominated A shares at 8.66 yuan apiece, CRRC said in a filing to the Shanghai exchange on Friday. That’s a 4.8 percent discount to the last close. Controlling shareholder CRRC Group plans to buy about 692 million shares in the placement, which will probably be completed within six months after it gets regulatory approval, according to the statement.
   The Chinese government combined former trainmakers CSR Corp. and China CNR Corp. last year to form CRRC, in a bid to better compete with Germany’s Siemens AG and France’s Alstom SA. Home to the world’s biggest high-speed rail network, China has identified the sector as one of 10 focus industries in a blueprint for economic development.
   Premier Li Keqiang is leading the nation’s overseas push by train equipment makers as part of the government’s broader strategy to turn China into an advanced industrial nation. They have targeted emerging markets in Africa, Latin America and Southeast Asia for rail-related orders, while also bidding for high-profile contracts in the developed world.
   CRRC Vice President Yu Weiping said in an April interview that the company’s interested in investing in more U.S. cities after it won a $1.3 billion rail-car contract for Chicago’s urban rail system the previous month.
   CRRC, which has 170,000 employees, is also interested in Europe and other markets, and is still committed to double its overseas sales to as much as $15 billion by 2020, Yu said.
   The company’s shares last traded in Shanghai at 9.10 yuan on May 13 before being suspended. The stock has lost 29 percent this year.
   [Editors note:] CRRC last September broke ground on a $60 million manufacturing facility in Springfield, Mass. The plant produces and assembles train cars for the Boston subway system as part of a $566 million contract CRRC signed with the Massachusetts Bay Transportation Authority (MBTA) in 2014.