Dalian brings Hutchison aboard
Conglomerate among four big players that will take up a third of $2.16b IPO
Listing candidate Dalian Port, operator of China's largest oil terminal, plans to sell 10 per cent of its shares to Hutchison Whampoa and three other investors in its $2.16 billion initial public offering in Hong Kong, market sources said.
The other three are Singapore's PSA International, Japan's largest shipping line Nippon Yusen Kaisha (NYK Line) and China Shipping Container Lines.
The sources said the investors had agreed to a six-month lock-up period.
It is understood that the four investors will take up a 10 per cent stake of Dalian Port's enlarged share capital, which equals about 30 per cent of its offer shares.
Dalian Port is set to offer 840 million shares at $2.175 to $2.575 each, representing a price-earnings ratio of between 15.09 and 17.87 times - slightly lower than its listed mainland counterpart Xiamen International Port.
Xiamen Port has risen 44.92 per cent since its listing in December last year and is trading at 19.42 times forecast earnings.
Market watchers said the move for world-class port operators to take a stake in Dalian Port was beneficial to all parties, giving them the chance to further expand their mainland operations.
The top two port operators - PSA and Hutchison - could further diversify their businesses into bulk and oil terminals by buying a stake in Dalian Port, an analyst said.
It will be the first time that PSA has tapped into the bulk and oil terminal business in the mainland although it has set up seven joint-venture port projects ranging from Dalian, Tianjin, Fuzhou to Guangzhou.
NYK Line and China Shipping, the region's leading container and tanker companies, could benefit from the integrated port facilities in Dalian, a European analyst said.
Dalian Port can handle not only very large crude carriers but also ultra large crude carriers, according to a source close to the syndicate. 'Shipping companies have to build larger tankers to cater for the need of energy-thirsty China,' he said.
Very large crude carriers can carry up to 320,000 deadweight tonnes of crude oil while ultra large crude carriers can move up to 550,000.
Dalian Port, brought to market by BNP Paribas and UBS, is set to market its float in Hong Kong today. It is expected to list by the end of the month.