- Long Yuan Construction Group (600491.SS) plans to issue 289.6 million shares at RMB 10.74 per share to raise RMB 3.1 billion through a non–public offering, according to Sohu.
Why It Matters:
- Long Yuan Construction Group plans to use the funds raised from the non-public offering to invest in four public-private partnership (PPP) projects, including two school projects and two infrastructure projects.
- The Long Yuan Construction Group entered the PPP business in 2014. In 2015, the company conducted PPPs valued at RMB 7.6 billion, and the amount increased to RMB 12 billion in the first nine months of 2016. The non-public offering can boost the company’s market share in the PPP market.
- The Chinese government launched PPP projects to solve the troubles which local governments had with a lack of funds . Although the central government has banned local governments from breaching their promises relating to PPP projects, the risks are still very high.