(Bloomberg) -- China Railway Construction Corp., one of the country's biggest infrastructure builders, plans to seek as much as $800 million in a spinoff of its tunneling machinery business, people with knowledge of the matter said.
China Railway Construction Heavy Industry Co., known as CRCHI, is working with advisers and plans to file a listing application with the Hong Kong stock exchange as early as this quarter, the people said. The company aims to start trading this year, said the people, who asked not to be identified because the information is private.
Hong Kong stocks entered a bull market this week, raising hopes that IPO volumes will recover after the slowest first quarter since 2013. First-time share sales in the city totaled $2.6 billion in the first three months of the year, with the largest deal raising just $328 million, data compiled by Bloomberg show.
Details of the offering including the fundraising size and timeline could change, the people said. An external representative for CRCHI said she couldn't immediately comment.
CRCHI, founded in 2007, makes equipment used in railway, mining and hydraulic engineering projects across China. Its products are also exported to about 30 countries including the U.S. and Canada, according to its website.
China Railway Construction said in June that it planned to list the business in Hong Kong after a restructuring, without providing further details. CRCHI's net income rose 25 percent last year to 1.64 billion yuan ($244 million), according to its parent's exchange filings.
Shares of China Railway Construction have risen 20 percent in Hong Kong over the past year, while the city's benchmark Hang Seng Index fell 2.1 percent.
To contact the reporter on this story: Crystal Tse in Hong Kong at ctse44@bloomberg.net
To contact the editors responsible for this story: Fion Li at fli59@bloomberg.net, Ben Scent
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