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Chinalco unit launches HK IPO without M. Stanley, UBS
HONG KONG |
HONG KONG (Reuters) - A unit of China's state-owned aluminum producer Chinalco on Tuesday launched a pared-down Hong Kong IPO without Morgan Stanley (MS.N) and UBS (UBSN.VX), which may have dropped out on concerns over the unit's dealings in Iran, sources said.
The deal could raise up to $200 million, Thomson Reuters publication IFR reported, with China International Capital Corp (CICC) and Guangfa Securities as its bookrunners.
China Aluminum International Engineering, or Chalieco, had planned to raise up to $500 million in March, when concerns over its business contracts in Iran prompted it to delay the IPO.
Chalieco, an infrastructure engineering and technology company, and subsidiary CNPT, had three contracts in Iran, according to a preliminary IPO prospectus.
Two sources said the global banks dropped out on concerns over the impact of Western sanctions on Iran, while a third source added Chalieco was not happy with Morgan Stanley and UBS after the deal was delayed from the original launch date in March. The sources declined to offer more detail.
A Chalieco spokeswoman in Hong Kong declined to comment on the offering. Morgan Stanley declined comment, while UBS didn't return a request for comment.
Chalieco's business in Iran dates back to 2005, when the company signed a $900 million contract to design and build an aluminum smelting plant in the country. It signed another 200 million euros ($252 million) contract in 2008 and its CNPT unit entered into a $4.7 million deal in 2010 to supply a cold rolling mill to an Iranian company.
Chalieco served a notice to terminate its 2005 and 2008 contracts on May 8, while CNPT terminated on March 15 its contract.
U.S. government sanctions on Iran prohibit American companies from engaging in any transactions, including financing or brokering, related to goods or services of Iranian origin or goods or services owned or controlled by the Iranian government.
U.S. investors are also barred from making any new investments in Iran or in property owned or controlled by the Iranian government.
The company operates in over 10 countries, with most of its overseas sales coming from India and Vietnam.
The company had 16.4 million yuan ($2.6 million) in revenue for its Iran services in 2009 and 18.2 million yuan in 2011, the IPO documents showed. By comparison, revenue in 2009 totaled 9.55 billion yuan and 12.2 billion in 2011.
(Reporting by Elzio Barreto; Additional reporting by Fiona Lau; Editing by Denny Thomas and Ed Lane)
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