Morgan Stanley Private Equity last night took advantage of the improved sentiment in the Hong Kong stock market over the past couple of days, as well as a renewed focus on the cement sector thanks to an ongoing initial public offering, to sell another batch of shares in China Shanshui Cement Group. This quick placement was priced at the top of the range, which resulted in total proceeds of HK$620m (US$80m).

This was the second time in under three months that Morgan Stanley’s private equity arm trimmed its stake in Shanshui Cement. On April 29 it teamed up with CDH China Fund to sell a combined $129 million worth of shares. Since then, the share price has risen 25%, which would have made it tempting enough to offload a few more shares after the lockup from the previous sell-down expired at the end of June. Morgan Stanley Private Equity and CDC both invested in Shanshui before its IPO in July last year.

The deal, which was completed in just 40 minutes, comprised 125 million shares that were offered at a price between HK$4.86 and HK$4.96 -- a discount of only 3.1% to 5.1% versus yesterday’s close of HK$5.12. The final discount of 3.1% is quite tight compared with other recent Hong Kong placements, especially when considering that the deal accounted for 14 days’ worth of trading volume.

Source: Finance Asia

Advertisement