Zoomlion eyes HK float, lawsuit ends New Materials IPO

PUBLISHED : Monday, 13 December, 2010, 12:00am
UPDATED : Monday, 13 December, 2010, 12:00am

Changsha Zoomlion Heavy Industry Science and Technology Development plans to raise as much as HK$16.5 billion in a float of its shares on the Hong Kong stock market, while polymer manufacturer China New Materials Holdings has cancelled its listing plan after a lawsuit was filed in a Hong Kong court.

Zoomlion, the second-largest maker of construction machinery on the mainland and the world's 10th largest by turnover, aims to raise between HK$12.16 billion and HK$16.5 billion from a global offering of 869.582 million shares.

The offer price ranges from HK$13.98 to HK$18.98 per share and 95 per cent of the shares will initially be offered in an international placing and about 5 per cent in a Hong Kong initial public offering. The Hong Kong IPO will begin today and close on Thursday. Trading of shares is expected on December 23.

Based in Changsha, the capital of Hunan province, Zoomlion listed in Shenzhen in 2000. The machinery maker said it planned to use 45.8 per cent of the net proceeds to strengthen and enhance manufacturing capability of key products, parts and components.

It owns eight manufacturing facilities in Hunan and Shaanxi provinces, and in Shanghai.

It also plans to spend 28 per cent of the net proceeds to expand operations overseas, with the rest of the proceeds for research and working capital.

From 2007 to last year, Zoomlion's turnover grew by a compound annual rate of 52.1 per cent to 20.76 billion yuan (HK$24.25 billon) from 8.97 billion yuan, while net profit showed a compound annual growth rate of 29.7 per cent to 2.42 billion yuan from 1.44 billion yuan.

For the first nine months of this year, Zoomlion's net profit rose 77 per cent to 3.06 billion yuan, while turnover grew 61.4 per cent to 23.9 billion yuan. Zoomlion is 21.4 per cent owned by the Hunan provincial government.

China International Capital Corp, Goldman Sachs, JP Morgan and Morgan Stanley are handling the deal.

Meanwhile, plastics manufacturer China New Materials announced it had cancelled plans to list on the Hong Kong stock market. In its offer document, the company had said it planned to sell 292.5 million shares in an offering at HK$2.33 each to raise HK$681.53 million.

But the company said yesterday that the offer would not proceed and share certificates already issued would be cancelled and investors reimbursed.

The company said it decided to cancel the offering because a writ of summons was served at the High Court on Friday in which a member of the group and the founding chairman of the company, Zhang Kaijun, were named as co-defendants with another non-group entity.

China New Materials said certain operational assets of the group were involved.

The company did not give details on the nature of the summons.