CCCC to spin-off dredging business

China Communications Construction Company (CCCC) has announced plans to spin-off its dredging business, with a listing of tradable shares on the Hong-Kong Stock Exchange. CCCC would retain a controlling stake in the company, but its interest would be diluted.

The proposal will be put to an Extraordinary General Meeting (EGM) in Beijing on August 17. Approval by CCCC’s H-series shareholders – the class of shares in CCCC traded on the Hong Kong Stock Exchange – is the final hurdle to the spin-off. It has already y been approved by China Securities Regulatory Committee (CSRC), China’s stock market regulator.

The price and value of the CCCC Dredging spin-off has not yet been announced. However, CCCC has confirmed it will retain a controlling interest in the company through non-tradable A-series shares.

CCCC’s dredging business achieved revenues of CNY 27.8 billion (US$ 4.5 billion) in 2014, making it the largest dredging company in the world in revenue terms. However, most of the work the company carries out is in China. Its backlog as of the end of 2014 was CNY 34.9 billion (US$ 5.58 billion).

CCCC itself is the fourth largest contractor in the world according to iC’s league table of the world’s 200 largest construction companies, with revenues in 2014 of CNY 366 billion (US$ 59 billion). The three contractors ahead of it in the league table were also Chinese state-owned contractors.