Shanghai Zhenghua Port Machinery yesterday signed an underwriting agreement with ABN-AMRO Rothschild and China Securities in Shanghai for the sale of 100 million Shanghai B shares at 43.3 US cents a share.
The US$43.3 million share-offer by the port machinery maker is priced at 9.5 times this year's earnings on a pro forma fully diluted basis. The offer represents 29.85 per cent of the company's enlarged share capital.
Placing of the offer is due to be completed this week and a listing is expected on the Shanghai stock exchange early next month, according to the underwriters.
Of the 100 million B shares on offer, Cosco Pacific - the listed arm of China's Ocean Shipping (Group) - will subscribe for 16.5 million shares, equivalent to nearly 5 per cent of Zhenghua's enlarged share capital, costing $7.1 million.
The Shanghai B-share candidate is ranked second in the world in terms of customer orders for the manufacture of container cranes and gantry cranes. The listing proceeds will help double the company's output from 20 container cranes and 25 gantry cranes a year and will also be used for equipment upgrading.
Shanghai Zhenghua is a member of China Harbour Engineering.