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HONG KONG (Reuters) - Five Chinese companies are aiming to raise up to a combined $2.1 billion from initial public offerings in Hong Kong, reinforcing the fundraising wave that made it the world's No.1 IPO market in 2009.
The IPO that will be most closely tracked is American International Assurance's (AIA) $15 billion Hong Kong IPO. AIA, the Asian life insurance unit of American International Group (AIG.N), plans to seek listing committee approval on September 21.
"The current market has rebounded in recent weeks. There is no doubt the market has liquidity to absorb large amount of IPOs," said Alex Wong, director of asset management at Ample Finance.
Five other companies are also launching offerings on Monday, including Chinese coking coal logistics company Winsway Coking Coal Holdings and Chinese property company, Sunac China Holding Ltd, aiming to raise $800 million and $300 million, respectively.
Winsway, partly owned by China-focused private equity fund Hopu Investments, had attracted $120 million in pre-IPO investments, including Winstar Capital Group, Silver Grant, according to a term sheet obtained by Reuters on Monday.
Winsway plans to list in the week of October 11, while Sunac aims to list on October 7. Bank of America Merrill Lynch (BAC.N), Deutsche Bank AG (DBKGn.DE) and Goldman Sachs Group Inc (GS.N) are handling Winsway's IPO.
Sunac postponed its IPO plan in December last year, citing poor market conditions, but investors are still cautious its IPO relaunch.
Wong said investors are focused on consumption plays in order to tap the massive and growing consumption sector in China but are cautious about the property sector due to the uncertainty of government policies.
Three other Chinese IPOs kicked off formal marketing road shows for their Hong Kong listings on Monday.
Shipping logistics company SITC International, aims to raise up to $527 million, children's garment maker Boshiwa International Holding Ltd is targeting up to $321 million and Chinese tea maker Besunyen Holdings Co Ltd plans to raise up to $169 million.
SITC is set to sell 650 million new shares at an indicative price range of HK$4.78 to HK$6.28 per share, according to the term sheet sent to investors. The issue will be priced on September 27 and Citigroup (C.N) and CICC are handling the deal.
Boshiwa plans to sell 500 million new shares at an indicative price range of HK$3.88 to HK$4.98 each and it has secured three cornerstone investors, including Singapore sovereign wealth fund GIC to have a combined $75 million shares.
Boshiwa's book has already been covered since it started bookbuilding on Monday, a source close to the deal said.
"With these cornerstone investors in place, it will keep up the impetus for their IPOs," said Antonny Cheng, managing director at Gain Asset Management Ltd, adding this would reduce the offering shares available for market and easily get covered by both institutional and retail tranches.
Health-tea maker Besunyen is selling 420.28 million shares in a range of HK$2.38 to HK$3.12 per share, raising capital to fund the purchase of production equipment, expand its distribution network, repay debt and for working capital.
Since the beginning of September, at least five companies have already launched their IPOs in Hong Kong, to raise a combined about $600 million.
Russian miner Petropavlovsk (POG.L) will also proceed with a Hong Kong listing of its non-precious metals division in October, to raise about $500-$600 million.
The Hong Kong Stock Exchange generated more than $30 billion in IPO proceeds last year, more than any other bourse.
Additional reporting by Michael Flaherty, Denny Thomas and Donny Kwok; Editing by Chris Lewis and Valerie Lee