Guangshen Railway Co, China's first national railway company to issue shares abroad, has successfully completed an initial public offering with the international tranche said to be three times subscribed.
'It was overwhelming,' a source close to the underwriting syndicate said.
The H-share company is raising up to $3.62 billion, making it the largest mainland offering in more than two years after Maanshan Iron & Steel Co.
Of the shares, 90 per cent were sold internationally, mainly in the United States, while the remaining 10 per cent were for a Hong Kong offering which closed yesterday. 'We have put up a four-week roadshow with the main purpose of optimising the quality of the book,' the source said.
The syndicate has adopted the US-styled institutional pot method to screen out short-term players, favouring institutional investors with a long-term view.
Guangshen, which runs China's most profitable railway line from Guangzhou to Shenzhen, pitched the shares at between $2.45 and $2.91, putting the multiple between 9.8 and 11.64 times this year's estimated earnings. The issue price will be fixed today. Fund managers expected the shares to be priced at the high end, judging by the overseas response.
For the Hong Kong offering, it was not clear how many applications had been received but the subscription was said to be more than two times.
