Guangdong Provincial Expressway Development Company, Ltd

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In July 1996, 135 million B-shares in the Guangdong Provincial Expressway Development Company, Ltd (GPEDC), about 20% of the company, were sold on the Shenzhen Stock Exchange. The IPO raised US$62 million, with 6.5% of the shares being placed with the Malaysian construction company, IJM Corporation, prior to the public share offering. The remaining shares in GPEDC are held by company employees and by the Guangdong Provincial Freeway Company (GPFC), a 100% state-owned company under the jurisdiction of the Guangdong Provincial Government. GPFC has a contract to build the 80km Fo-Kai Expressway and the Guangfo Expressway. Construction of Fo-Kai is being financed through GPEDC's B-shares, GPEDC's own funds, GPFC own funds, and a US$120 million loan from the World Bank to GPFC (part of a global loan approved by the IBRD in 1992 to finance highway improvement in Guangdong province). GPEDC has a 25% operating interest in the Fo-Kai Expressway, through its share in the Fo-Kai Operating Company. GPEDC also has operating interests in the Jiujiang Bridge and Guangzhou-Foshan Expressway of 100% and 75% respectively. Construction started in early 1993 with World Bank support. The share issue was chosen as the best way to raise additional financing. In January 1998, the company issued 100-million A-shares raising US$ 63.8 million (Rmb$ 528 million) in divestiture revenues to fund the acquisition of part of Fokai Company's shareholding rights and the expansion project of Guangfo Expressway (although the purchase of Fokai Company's shares ended up not happening). In 1999, GPEDC announced that it would be constructing a new highway from Yangjiang to Dianbai. Total length will be an 83km stretch with 4 lanes. Cost will be 3 billion yuan, 70% of which will be financed by the state-affiliated Hongyuan group. During 2001, IJM partially cashed out from its investment in the company for a capital gain of approximately RM122.26m. None None