China Tianrui Group Cement, a leading producer in the Henan and Liaoning provinces, yesterday kicked off both the institutional roadshow and the retail offering for an initial public offering of between HK$996.17m and HK$1.45bn (US$124m to $186m).
The company is offering 400.9 million shares at a price ranging from HK$2.41 to HK$3.61 each, according to a term sheet. The deal size could be increased to as much as US$214m if the 15% greenshoe is exercised in full. The offering accounts for 16.7% of the equity capital pre-shoe and 18.7% post-shoe. All the shares are new.
The cement producer has set aside 10% of the deal for Hong Kong retail investors and will offer the remaining 90% to institutional investors.
China Tianrui hits the market after a score of companies have flocked to Hong Kong in recent weeks to grab the last window to launch an IPO this year. The list of large-scale issuers include Chow Tai Fook Jewellery and New China Life Insurance, which have raised US$2bn and US$1.9bn respectively and are both scheduled to start trading today.
Although the overall response has been rather cautious – most of the IPOs have priced either at or near the bottom of the indicated ranges and seen weak demand from retail investors – Hong Kong is on its way to becoming the world’s top destination for new listings in 2011 for the third year in a row, according to Dealogic.