Cosco Shipping is reported to be considering raising capital for the first time on the London Stock Exchange (LSE).
China’s largest shipowner is hoping to take advantage of a new initiative between the LSE with Shanghai’s bourse, Reuters reported.
The Shanghai-London Stock Connect will enable Chinese companies to raise fresh money on the LSE through issuing global depository receipts (GDR).
COSCO Shipping Holdings Co, which is listed in both Shanghai and Hong Kong, is examining the possibility of issuing GDRs in London, Reuters said quoting two unnamed finance sources.
“Any capital raising would be large to make it worthwhile and also to bolster connections with foreign investors,” one of the sources is quoted as saying.
“For political reasons as well, London would be a preferable capital destination for COSCO rather than New York, for instance.”
COSCO, which has an estimated market capitalization in Shanghai of $5.5bn, is the world’s third largest container shipping line.
Earlier this year it completed its $6.3bn acquisition of Hong Kong’s OOCL, helping to strengthen its leading position in global shipping.
Britain’s shipping minister Nusrat Ghani had held meetings with COSCO officials as part of efforts to boost trade between the UK and China, according to Reuters.
Ghani is said to have met with “a number of companies and partners” during a visit to China earlier this year.
Under the rules, companies listed in the two cities can apply for floatation on each other’s exchanges through the issuance of depository receipts.
London-listed firms can initially only issue Chinese Depository Receipts (CDR) backed by existing shares, meaning they cannot raise funds through Shanghai listings.
