China is piloting a program to allow companies to issue preferred shares on the over-the-counter market in Zhejiang province, Shanghai Securities News reported Friday, citing unnamed sources. Zhejiang Lonsid Healthy Drinking Water Equipment Co. Ltd., the first company in the pilot program, plans to issue 16.55 million preferred shares, about 25 percent of its shareholding, to raise up to 150 million yuan (US$24.4 million), the report said. In addition, the China Securities Regulatory Commission is drafting plans to allow companies to issue preferred A shares. The scheme is expected to be implemented after an ongoing reform of the initial public offering market, the report said. Preferred shares are a class of equity that has preference over common stock in the payment of dividend and asset liquidation but they ordinarily do not trade and carry no voting rights.
– Contact HKEJ at [email protected]