HONG KONG May 16 The engineering unit of
China's Sinopec Group, Asia's largest refiner, raised $1.8
billion in Hong Kong's biggest initial public offering in almost
six months, IFR reported on Thursday, citing a source familiar
with the deal.
The offering comes after state-owned China Galaxy Securities
Co Ltd raised $1.1 billion in an IPO just a day
earlier, adding a much needed jolt of activity to equity capital
markets in Hong Kong that have remained largely moribund for
most of the year.
Sinopec Engineering (Group) Co Ltd, as the unit is
called, sold 1.33 billion new shares at HK$10.5 each, said IFR,
a Thomson Reuters publication.
The company launched the deal on May 6, with an indicative
range of HK$9.80 to HK$13.10 per share. On Wednesday it narrowed
the range to HK$10.50-11 per share.
Hong Kong, the top global IPO destination for two years
straight in 2009 and 2010, has lingered in 13th place in global
rankings so far this year behind countries like Iraq and New
Zealand, with $1.1 billion worth of deals before the two large
offerings by China Galaxy and Sinopec Engineering.
The two deals will vault Hong Kong to third among global
exchanges in IPO volumes as of mid-May, behind New York and Sao
Sinopec Engineering secured commitments for $350 million
worth of shares from seven investors including logistics and
transportation company China Shipping (Hong Kong) Holdings and
units of China Aerospace Science and Technology Corp.
The company plans to use most of the IPO proceeds to support
its engineering, procurement and construction (EPC) services
business and set up six research and development centers in
Citic Securities , JPMorgan and
UBS were hired as sponsors of the offering, with
Goldman Sachs also acting as a joint global coordinator
on the deal. A group of nine other banks will also help manage
the IPO as joint bookrunners.
The banks stand to earn as much as $33.8 million in fees for
managing the IPO, equivalent to a 1 percent underwriting
commission and an up to 0.8 percent incentive fee, according to
the IPO prospectus.
Sinopec Engineering is controlled by China Petrochemical
Corp, the state-owned integrated oil behemoth also known as
Sinopec Group that is also the parent of China Petroleum and
Chemical Corp .