* Rongsheng hires M.Stanley, JP Morgan for IPO
* Aims to raise up to $1.5 bln, less than 2008 plan
* Early investors including Goldman made profitable exit
(Updates to add links to data)
By Kennix Chim and George Chen
HONG KONG, May 4 Jiangsu Rongsheng Heavy
Industries Co Ltd has appointed Morgan Stanley (MS.N) and JP
Morgan (JPM.N) to finalise plans for its long-awaited IPO in
Hong Kong, aiming to raise up to $1.5 billion in the fourth
quarter, sources told Reuters on Tuesday.
This is Rongsheng's latest bid to go public after it failed
to raise more than $2 billion from a planned IPO in Hong Kong
in 2008, mainly as a result of the global financial crisis.
Rongsheng's early main shareholders included an Asia
investment arm of Goldman Sachs (GS.N), U.S. hedge fund D.E.
Shaw and New Horizon, a China fund founded by the son of
Chinese Premier Wen Jiabao.
The three investors sold off their stakes in Rongsheng for
a profit early this year, said the sources familiar with the
situation. Representatives for the banks, funds and Rongsheng
all declined to comment.
The sources declined to be identified as they were not
authorised to speak to the media.
For Starmine comparative data: link.reuters.com/tep52k
Rongsheng's revived IPO plan comes at a challenging time.
Smaller domestic rival, New Century Shipbuilding, slashed its
Singapore IPO in half last week, planning to raise up to $560
million from the originally planned $1.24 billion due to weak
market conditions. [ID:nSGE640001]
After the reduction of the number of shares offered, New
Century Shipbuilding's offering price represents a multiple of
6.5 times to 7.9 times forecast earnings for 2010.
By comparison, Singapore-listed Yangzijiang Shipbuilding's
(YAZG.SI) trades at 10.3 times forecast earnings, while South
Korea's Hyundai Heavy (009540.KS) trades at 7 times.
Given uncertainty in the global shipbuilding business
environment as well as growing concerns over a huge flow of
fund-raising events in Hong Kong, investment bankers suggest
the potential size for Rongsheng could be $1 billion to $1.5
billion, according to the sources.
Investors have turned cautious on the industry after it was
dealt a heavy blow by the economic downturn, with orders
shrinking last year and the sector yet to fully recover.
Rongsheng is seeking to tap capital markets to fund fast
growth and aims to catch up with bigger state-owned rivals such
as Guangzhou Shipyard International Co Ltd (600685.SS)
Rongsheng won a $484 million deal to build four ships for
Oman Shipping Co last year. The vessels would carry exports
from an iron ore pellet plant in northern Oman which is
expected to begin production in the second half of 2010.
Editing by Ken Wills and Lincoln Feast)