China Merchants Energy Shipping Co., the country's biggest oil carrier, is set to raise around $1.4 billion in China's fourth largest initial public offer this year, as Reuters reports. The Shanghai-based company, part of ports-to-roads conglomerate China Merchants Group, will float as many as 1.2 billion A-shares and list in Shanghai by the end of November, the firm said in a prospectus released on Friday.he IPO, which will account for 35 percent of the firm's expanded capital, is going ahead after Beijing lifted a ban on domestic equity issues in May and began encouraging the country's largest companies to float shares at home.nergy Shipping, which has China's biggest oil tanker fleet comprising 14 tankers with a combined capacity of 2.56 million tonnes, said it needed 5.068 billion yuan ($644 million) to buy new ships and a further 651 million yuan to build liquefied natural gas carriers.Our company's assets will be expanded and profitability will be enhanced after investments using the proceeds are implemented," it said.he rest of the proceeds will be used to pay debt and supplement working capital, it said without elaborating. It has yet to set a price for its A-shares.The company's earnings per share in the first half of this year were 0.23 yuan.
Chinese IPOs are typically set at a price/earnings ratio of more than 20 times full-year EPS, so the offer could be priced at about 9.20 yuan per share, raising around 11 billion yuan ($1.4 billion), according to Reuters calculations.Energy Shipping is currently 83.13 percent owned by China Merchants Group's shipping unit. Its second biggest shareholder, with 16 percent, is Sinopec Group, the parent of Sinopec Corp. , Asia's biggest oil refiner.Since May, Chinese companies have conducted domestic IPOs totalling more than 110 billion yuan, including a record offer worth more than 40 billion yuan by Industrial and Commercial Bank of China . The other two big IPOs were Bank of China and Daqin Railway . ($1 = 7.864 Yuan)