| Since State Grid Corporation (SGC) of China took mechanism reform in 2002, the development of SGC has faced lots of new opportunities and challenge. That SGC should be restructured and go public become a necessity. This paper focuses on the advantages and weakness of SGC different listing methods under present economic background. Meanwhile it addresses the objective listing mode of SGC and discusses the solution to the problems encountered in the listing process.It is necessary that SGC should go public as it optimizes the power resource allocation and capital structure. Furthermore, it helps to solve the problem between the shortage of power grid construction capital and the rapid growth of power demand, and to establish modern enterprise management system among the power enterprises. There are three main listing modes which could be chosen by SGC. The first is the core assets listing. The second is un-core assets listing and the final is IPO (initial public offering). IPO is the final objective of SGC listing which is based on the restructuring of Whole Corporation. This will be implemented step by step according to the real situation. In the short run, it will realize the listing of assets which cross different provinces and are connected to headquarters' grid on domestic and abroad market. In the long run, it will continue to reorganize and acquire the unlisted assets in order to fulfill the final objective.SGC has undertaken a lot of historical burdens since mechanism reform. Power grid assets listing may encounter some problems such as tariff problem, operation performance problem, affiliated transaction problem, separation between main companies and subsidiaries problem, power transmission and distribution problem and etc. Those problems can be solved by using market which allocate the resource automatically under the basic reform frame of SGC.It is proper to list SGC at the level of Whole Corporation according to the power grid characteristics and real situation. Power transmission assets of headquarter should go public first. Then SGC will acquire the core assets of each regional corporation one by one to realize the final IPO of whole corporation assets. |
