* IPO priced at HK$1.45/share, bottom of indicative range
* Most proceeds set aside for new land purchases
* Second IPO in a week by property developer to price at
* Shares to debut in Hong Kong Nov. 29
(Adds details of IPO, Future Land finances, Hong Kong markets)
By Elzio Barreto
HONG KONG, Nov 23 Chinese property company
Future Land Development Holdings Ltd has raised about
$265 million in a Hong Kong initial public offering, pricing the
deal at the bottom of its proposed range in the latest sign of
the tough fund-raising environment in the city.
Future Land, which focuses on projects in the Yangtze River
Delta, China's most populous area which includes cities such as
Shanghai, priced the IPO at HK$1.45 per share, according to a
term sheet of the deal seen by Reuters. The stock will start
trading on Nov. 29.
The company became the second real estate developer to price
an IPO in Hong Kong at the bottom of its proposed range in the
past week, following CIFI Holdings Group Co Ltd's $215
million offering on Nov. 16. CIFI traded down 1.5 percent from
the IPO price in mid-morning on Friday in its trading debut.
The tepid response to the two listings contrasts with the 32
percent gain in the Hang Seng Property Index so far in
Despite the tough fund-raising climate, the companies
proceeded with their offerings as they need cash to grow their
businesses. They might also have faced an uncertain global
economic environment if they had waited until next year.
Future Land offered 1.42 billion new shares, putting the
total deal at HK$2.06 billion ($265 million). It had marketed
the IPO at an indicative range of HK$1.45 to HK$1.79 per share.
The company plans to use 90 percent of the proceeds from the
IPO to buy new land where it already operates and to expand into
other cities, with the remaining 10 percent set aside for
Future Land's property portfolio includes 28 projects
already completed and 46 that are under development, most of
them in Changzhou, a city 160 km (99 miles) northwest of
Founded in 1996, Future Land is controlled by Wang Zhenhua,
who is also the company's chairman and chief executive, with a
72 percent stake.
Future Land had $80 million in commitments from three
cornerstone investors in the IPO, with $39 million from Axius
International Investment, a unit of Hainan Airlines parent HNA
Group. Asset managers Guangdong Finance Investment International
and Greenwoods Asset Management pledged $26 million and $15
The company posted 1.4 billion yuan ($225 million) in profit
in 2011, on revenue of 10.8 billion yuan, compared with 1.05
billion in profit and 7.6 billion yuan in revenue a year
earlier. Profit in the six months to June 2012 reached 352.6
million yuan on revenue of 3.7 billion yuan.
Bank of America Merrill Lynch was hired as sole
global coordinator for the IPO, with China International Capital
Corp (CICC) and Haitong International acting as joint
($1 = 7.7508 Hong Kong dollars)
($1 = 6.2289 Chinese yuan)
(Reporting by Elzio Barreto; Editing by Chris Gallagher)