Chinese shipbuilder JES in IPO to raise $250m

CHINA-BASED shipbuilder JES International Holdings launched an initial public offering yesterday aimed at raising
gross proceeds of $250 million. When floated, it will be the third Chinese shipbuilder to list here, following
Yangzijiang Shipping (Holdings) in April this year and Cosco Corp (S), both of which have been rewarded with
strong investors' interest. Yangzijiang has seen its market capitalisation jump seven-fold from $943.54 million to
$6.93 billion currently, while Cosco Corp has made it to the Straits Times Index list since 2004. JES' mainboard IPO
consists of 373.14 million new shares at 67 cents each. This includes an international placement of 356.94 million
shares to institutional investors and a public tranche of 16.2 million shares. The net proceeds of about $232.1
million will be used primarily for financing the construction of a new facility adjacent to its existing Shiwei Yard,
repayment of a bank loan, working capital and general corporate purposes.

We plan to expand our current shipyard on land adjacent to our existing facility and expect to benefit from
approximately 286 metres of additional deep-water coastline. Subject to receiving the necessary approvals from the
PRC authorities, we expect to commence operations at our new facility in the second quarter of 2009 and to become
fully operational in the fourth quarter of 2009. The new facility will consist of a 400-metre long by 140-metre wide dry
dock, a hull steel structure shop with an area of 100,000 square metres and auxillary facilities, one 1,200-tonne and
two 400-tonne gantry cranes and other lifting equipment. The offer will close on Dec 17 and trading of the shares is
expected to commence on Dec 19. ABN Amro Rothschild is the global coordinator, bookrunner, issue manager and
underwriter for the offer, and Oversea-Chinese Banking Corporation is the coordinator of the public offer and subunderwriter.

ABN Amro was also granted an over-allotment option by the JES group and the vendor JES Overseas Investment to
buy up to 48.51 million shares from JES group and 7.46 million shares from JES Overseas Investment at the offer
price to cover the over-allotment of offer shares, if any. If the over-allotment options are exercised in full, the net
proceeds are estimated to be about $263.6 million. JES produces a wide range of vessels, including bulk carriers,
containerships, and roll-on/roll-off vessels. Its clients include major shipowners based in Europe, Canada and Asia,
including China. It is now seeking contracts to build larger, higher-margin vessels, and plans to begin producing
crude oil tankers both in its existing yard and at the new facility. The new facility will have the capacity to construct
two 300,000 dwt very large crude oil carriers (VLCCs) at any one time. Last year, JES' net profit grew 23 per cent
from 2005 to 131.8 million yuan (S$25.8 million) on the back of a 46 per cent rise in revenue to 1.22 billion yuan.