Yangzijiang Shipbuilding Holdings made history at the beginning of September by becoming the first mainland Chinese company to list shares on the Taiwan Stock Exchange.
The company, which began constructing commercial vessels in Jiangyin, Jiangsu province, in 1956, is one of China’s biggest shipbuilders. It listed on the Singapore Stock Exchange in 2007.
Its Singapore listing opened the legal loophole that enabled it to apply to list in Taiwan. Under Taiwanese regulations, only mainland firms listed in Hong Kong or Singapore are allowed also to list in Taiwan.
Apart from the permission of Singapore Exchange Securities Trading, the shipbuilder obtained the approval of Taiwan’s central bank and the Taiwan Stock Exchange. The latter is increasingly open to mainland firms, especially since the signing of the Economic Co-operation Framework Agreement between Taiwan and mainland China.
Under the Yangzijiang deal, which was well received by Taiwanese investors, the company offered for sale 240 million Taiwan depository receipts (TDR) – double the amount originally planned – and raised US$141 million. Each TDR represents 0.5 common shares in the company.
This is a good omen for other PRC companies that may wish to tap the considerable pool of investors in Taiwan to raise capital there. The Taiwan Stock Exchange is also interested in attracting more mainland companies to list.
