Mainland commercial developer Wuzhou International plans to raise up to HK$1.71 billion through an initial public offering in Hong Kong.
The company, which focuses on development and the operation of wholesale markets and commercial complexes in the Yangtze River Delta and Jiangsu province, begins the public offering today. It will close on June 5.
The shares are priced in the range of HK$1.15 to HK$1.50. The final price will be determined on June 5, while trading will begin on June 13.
About 60 per cent of the money raised from the public offering will be used to finance land acquisitions and develop projects for which the company has signed memorandums of understanding. About 30 per cent will be used to develop other projects, while the remaining 10 per cent will be used for operational expenditure.
The company owns 11 wholesale markets and 14 mixed-use commercial complexes with a total gross floor area of about 7.3 million square metres in six provinces. Its gearing ratio increased significantly from 97.7 per cent in 2011 to 145.9 per cent last year. The firm had four outstanding loans from trust institutions as of March 31. The interest rates on such loans are usually 2 to 12 percentage points higher than bank loans.
Chief financial officer Chan Sze-hon said: "The loans from trust institutions is less than 33 per cent of our total debt. It would be easier for us to get financing at lower rates after the listing [through bonds or rights issues]."
Chairman Shu Cecheng said the firm planned to expand to other mainland cities after the listing.
Meanwhile, Hopewell Hong Kong Properties, a spin-off from conglomerate Hopewell Holdings, plans to raise up to HK$6.05 billion through a Hong Kong flotation, according to a term sheet seen by the South China Morning Post.
The company, controlled by Gordon Wu Ying-sheung, set an indicative range of HK$15.30 to HK$17.8 per share, which translates into a discount of up to 43 per cent on the net asset value. It is selling 340 million shares, or 18.5 per cent of the enlarged share capital.
The firm will start taking orders from retail investors from Thursday next week. The price of the new shares is slated to be fixed on June 12, with trading expected to start on June 19.