Coal port share sale fully covered

The HK$5.56 billion initial public offering of Qinhuangdao Port, the world's largest coal port, has been fully covered by investors in its international tranche as it kick-starts its Hong Kong share sale today, market sources said.

The port operator for coal, iron ore and major dry bulk cargo had declined Brazilian iron ore giant CVRD's request to be a cornerstone investor, said a person familiar with the situation.

CVRD's 400,000-tonne iron ore vessels have been banned from berthing at mainland ports since December last year, seen as a bid to protect financially hit mainland shipping firms.

Cornerstone investors have already soaked up 42.7 per cent of the total offering. They are mainly the subsidiaries of coal and power plant companies using the port, including China Coal Hong Kong, China Datang Overseas and Guodian Fuel.

The company plans to offer 829.85 million shares at a price range between HK$5.25 and HK$6.70 per share. It will price the firm at 11 to 14 times projected earnings for next year, according to an analyst.

"Unlike container ports, major dry bulk cargo ports are more resilient to fluctuations in the global economy," an analyst said.