China Trainmakers CNR, CSR to Make ‘Major’ AnnouncementBloomberg News
CSR Corp. and China CNR Corp., the nation’s two biggest trainmakers, said they will make a “major” announcement within a week.
The companies will give further details within five working days, the railmakers said in separate statements today. The shares were halted from trading in Hong Kong and Shanghai today pending the release of an announcement containing inside information, according to their regulatory filings.
Shares in CSR and China CNR had surged last month after a report that China’s State-Owned Assets Supervision and Administration Commission, or SASAC, is seeking the merger of the two companies to boost exports of high-speed railway technologies. The plan was reported by Caixin on its website Sept. 3, citing people it didn’t identify. The two companies said at the time that no plans had been submitted.
“Everybody is obviously expecting CNR and CSR to announce something relating to the merger between the two companies,” said Lawrence Li, a Shanghai-based analyst at UOB Kay Hian Investment Co. “But it remains to be seen what form any merger would take. Some form of collaboration might be more efficient if it’s just overseas projects they are concerned about.”
China CNR fell 2.3 percent to HK$7.66 in Hong Kong on Oct. 24. CSR declined 0.3 percent to HK$7.89.
Zhang Yong, the head of CNR’s publicity department, said he had no additional information on the suspension. Two calls to CSR were not answered. SASAC didn’t immediately respond to a faxed request for comment.
First U.S. Deal
Last week, Boston transport authorities awarded CNR a $567 million contract to supply trains for the city’s subway system, the first deal of its kind for a Chinese company in the U.S. CNR offered the cheapest price among five bidders and a little more than half of Bombardier Inc.’s bid.
The deal breaks new ground for Chinese train makers whose overseas push, backed by Premier Li Keqiang, has been mostly limited to developing markets. CSR plans to bid for rail projects in California, though no contracts have been signed.
CSR reached an agreement to sell six bullet trains to Macedonia in its first European sale, Xinhua reported June 24.
China is competing aggressively for overseas rail projects, targeting emerging markets, such as Africa, eastern Europe, Latin America and Southeast Asia. Keqiang has touted the country’s rail equipment, engineering and construction companies during overseas trips, signing several deals along the way.
— With assistance by Clement Tan, and Tian Chen