Chalco plans to raise $1.3 billion in share offering

Aluminum Corporation of China Ltd (Chalco) , the country’s largest aluminium producer, plans to issue new shares to raise up to $1.3 billion to fund development and expansion projects.Chalco will apply to the China Securities Regulatory Commission (CSRC) within six months for the issue of not more than 1.25 billion additional Shanghai-listed A shares. The shares, which buyers will not be able to sell for 12 months, will be issued to no more than 10 target subscribers at a price to be determined after the CSRC approval, it said.

Chalco said the money would be used to fund the Xing Xian alumina project and Zhongzhou Ore-dressing Bayer Process expansion construction project and serve as working capital. The Hong Kong shares lost more than half of their value last year on the blue chip Hang Seng Index.A supply glut on the back of a deepening European debt crisis and global economic slowdown have hurt demand and prices for the metal, sending many aluminium producers into the red and triggering a round of production cuts, including at top U.S. maker Alcoa.Chalco estimated last month that its profits for 2011 had dropped more than 50 percent from the previous year.