People.cn Co., which operates the website of the Chinese Communist Party’s official newspaper, aims to raise at least 527 million yuan ($84 million) from an initial public offering in Shanghai to improve its portal and add users.
The web portal will use proceeds from the stock sale to improve its service for mobile-phone users, upgrade networks and boost hiring of editorial staff, it said in an IPO prospectus filed to the Shanghai stock exchange today. People.cn, a unit of the People’s Daily, will set the price for its IPO on April 20, and start marketing the stock to investors Friday, it said.
People.cn said it is upgrading services to attract users and compete with online portals run by companies including U.S.- listed Sina Corp. and Sohu.com Inc. Parent People’s Daily, founded in 1948, is the official newspaper of the ruling Communist Party.
“In terms of website visitors, we are significantly lagging commercial websites such as Sina and Sohu,” People.cn said in the prospectus. Competitors enjoy advantages in accessing capital markets and content, it said.
People.cn will use IPO proceeds to fund a 527 million yuan, 3-year spending program to upgrade services, it said. If the company raises more money from the IPO than is needed for the spending program, the surplus will be used for working capital, it said.
People.cn will offer 69 million shares, representing 25 percent of its enlarged share capital, in the proposed IPO. At present, People’s Daily owns almost 80 percent of the website’s stock.
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