China's BBMG to raise $700 million in HK IPO

HONG KONG (Reuters) - BBMG Corp, one of China's top construction materials makers, plans to raise about $700 million in a Hong Kong initial public offering, joining a queue of companies tapping ample liquidity and a strong appetite for new listings.

"It makes sense to see the listing candidates tap the market when it still has ample liquidity," said Patrick Yiu, a director at CASH Asset Management.

"BBMG is set to be a hot issue as it is not only a construction materials maker but also a property play, a sector in which activity has picked up significantly," Chia added.

Many Chinese developers posted strong growth in apartment sales during first half, thanks to government support measures and hopes that China's economy will be among the first to recover.

BBMG plans to sell 933.33 million shares with an over allotment of up to 140 million shares at prices to be determined later. Three-quarters of the proceeds will be used to fund its expansion plans with remainder to repay bank loans and for working capital, according to a term sheet released on Monday.

Macquarie Group (MQG.AX) is a joint bookrunner and joint lead manager of the issue. UBS (UBSN.VX) was also involved in the deal, sources said last week. The pricing of the offer will be fixed on July 23 with trading to start on July 29.

China Life (2628.HK) is one of the main investors in BBMG, local media reported.

Activity in the Hong Kong IPO market has picked up in recent months as the stock market rallied with listing hopefuls reviving plans that had been put on hold last year amid the financial crisis.

Shares in Chinese herbal shampoo maker BaWang International (1338.HK) soared more than a third in its market debut last Friday.

So far in 2009, 14 companies have launched Hong Kong IPOs, raising about HK$19.2 billion ($2.5 billion).

Chinese menswear designer Lilang is also planning to raise about $100 million in an initial public offering of shares in Hong Kong later this year, according to a report.

($1=HK$7.75)

(Reporting by Alison Lui and Donny Kwok; Editing by Lincoln Feast)