Everbright ready to kick off US$2 b float
Beijing bank begins third attempt to list in HK with a public offering of 12 billion shares on the back of buoyant demand for newcomers
China Everbright Bank is to kick-start its US$2 billion Hong Kong float next week in its third attempt. The medium-sized Beijing lender's move comes on the back of a meaningful recovery in demand for new shares, people familiar with the deal said.
Bankers said Everbright's offering was another "tough deal", with persistent weakness in the company's Shanghai-traded shares and concern over mainland bank asset deterioration.
It was understood Everbright intended to price its long-planned H shares at a modest premium to its A shares, which are trading at a price-book of 0.87 times, a syndicate banker said.
Everbright's Shanghai shares are down 7.21 per cent this year, compared with a 3.66 per cent decline in the Shanghai Composite Index.
Everbright's non-performing loans rose 16.1 per cent to 8.8 billion yuan (HK$11.1 billion) in June from 7.6 billion yuan in December last year, while its non-performing loan ratio edged up six basis points to 0.8 per cent. Sources said Everbright's institutional book was well covered by a number of cornerstone and anchor investors and the deal launch was ready to be kicked off next week.
Newly listed mainland banking stocks have had a mixed year. Huishang Bank has risen 1 per cent above its offer price, while Bank of Chongqing, the first listing among a slew of city commercial banks, are below water.
The revival of Everbright's listing came after China Cinda Asset Management, the first listing hopeful among the country's bad-loan managers, secured US$1.1 billion worth of cornerstone investments from 10 institutional investors, including the world's biggest sovereign wealth fund Norges Bank's US$150 million and the world's largest distressed asset investor Oaktree Capital's US$53 million.
Cinda's US$2.5 billion offering could be the biggest deal in the city's listing market after mainland e-commerce giant Alibaba scrapped a HK$100 billion listing plan this year.
Meanwhile, Qinhuangdao Port, the mainland's biggest coal shipping port by output, has started book building for a US$717 million Hong Kong float after attracting seven cornerstone investors for a combined US$240 million.
It is selling 829.9 million shares, of which 9.1 per cent of them are old shares owned by the National Social Security Fund, at an indicative range between HK$5.25 and HK$6.70 a share.
Cinda and Qinhuangdao will price their shares on December 5.
