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UPDATE 1-Italy's M&G Chemicals plans Hong Kong IPO -WSJ

* Hopes to raise about $500 mln via Hong Kong listing

* Has formally applied for a listing, paper says

MILAN, Aug 13 (Reuters) - Italy’s M&G Chemicals is looking to raise about $500 million through a public floatation in Hong Kong in October, the Wall Street Journal reported on Tuesday, citing two people with direct knowledge of the deal.

M&G, which makes PET, a chemical used for packaging soft drink bottles, had appointed Citic Securities and Deutsche Bank to handle the IPO, the Journal reported, citing sources. ()

It said the company last month filed an A1 form to the Hong Kong stock exchange - a formal step to apply for a listing.

M&G Chemicals was not immediately available for comment.

Stock market listings among companies in Italy have recently been dominated by upscale fashion and luxury brands.

Upmarket notebook maker Moleskine, which listed on the Milan bourse in April, was the fourth upscale Italian brand to tap the stock market in under two years, following the IPOs of fashion house Prada, shoemaker Salvatore Ferragamo and cashmere brand Brunello Cucinelli.

Improving stock markets since the start of the year have initially revived interest in new issues after years of subdued activity because of the global financial crisis. Italy has been battling with its longest recession since World War II.

M&G would be the first major Italian firm to list in Hong Kong since Prada’s debut there in June 2011.

But while Italy’s luxury brands have proven resilient and successfully gone public since 2011, a series of companies worldwide have either delayed or cancelled their stock market debuts in recent months or cut offer prices due to market volatility.

According to its website, M&G has an annual turnover of around $3 billion and a PET production capacity of 1.7 million tonnes. Its manufacturing plants are based in Brazil, Mexico, Italy and the United States.

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