IFC and Anhui Conch

IFC and Anhui Conch
Published: 05 April 2006

Washington DC-based International Finance Corp has agreed to pay a higher-than-anticipated price for a 3.7 per cent stake in China’s largest cement manufacturer, Anhui Conch Cement Ltd. An official at IFC said the price increase was due to "market and regulatory changes," without elaborating. IFC’s regional spokesman, Desmond Dodd, said the Anhui Conch investment follows an established pattern in which IFC sells bonds to a company before taking up an equity stake. The investor in October sold Anhui Conch Rmb650 million worth of so-called panda bonds.  The equity deal was signed in December just as Anhui Conch was badly hit by a government drive to curtail investment in the Chinese construction industry.  Anhui Conch reported sales of more than 38Mt of cement in the first three quarters of 2005, up 56 per cent from a year ago.