Shenwan Hongyuan seeks up to USD1.3 billion in HK listing

Shenwan Hongyuan Group Co., China’s sixth largest brokerage by market value, is seeking to raise as much as HKD9.8 billion (USD1.3 billion) in a Hong Kong listing.

The company is offering 2.5 billion shares at HKD3.63 to HKD3.93 apiece in the share sale, according to terms for the deal obtained by Bloomberg. It aims to price the offering April 18 before beginning trading April 26, the terms show.

A $1.3 billion deal would be the largest first-time share sale in Hong Kong this year amid a relatively slow start, according to data compiled by Bloomberg. Companies have raised $2.7 billion via first-time share sales in Hong Kong this year, compared to $3.1 billion during the same period last year, the data show.

The offering has attracted 13 cornerstone investors which agreed to subscribe for a total of about $829 million of stock, or about 69 percent of the base offering assuming mid-point pricing, the terms show.

The asset management arm of Industrial and Commercial Bank of China Ltd. agreed to invest in $300 million of shares, while Huaxia Life Insurance Co. will buy $100 million of them, the terms show. China Life Insurance (Group) Co. and China Reinsurance (Group) Corp. are also among the cornerstone investors.

Shenwan Hongyuan plans to use some of the proceeds to develop its securities business and international business, as well as making principal investments, according to a preliminary prospectus.

The brokerage’s Shenzhen-listed shares jumped 14 percent in the past year, while the CSI 300 Index rose 3.4 percent during the same period. Shenwan Hongyuan Capital, Goldman Sachs Group Inc., ICBC International Holdings Ltd. and ABC International Holdings Ltd. are joint sponsors for the Hong Kong share sale, the prospectus shows. Crystal Tse, Bloomberg