China's fifth largest steel-maker, Benxi Iron & Steel Co, hopes to begin its sale of 400 million B shares next week, raising up to one billion yuan (about HK$929 million).
Based on a price-earnings ratio of about 7.5 times, Benxi's shares will be priced between HK$2 and $2.50, sources said.
At these prices, the Liaoning-based company - known as Bengang - will net between 800 million and one billion yuan in return for 35.2 per cent of its enlarged share capital.
Sources said the decision to proceed with the listing follows preliminary approval from the China Securities Regulatory Commission (CSRC).
A promotional roadshow is expected to begin in Shenzhen next week. Trading is expected to start next month on the Shenzhen stock exchange.
The listing proceeds will be used to upgrade Bengang's production facilities to allow it to participate in continuous casting and continuous rolling production. The upgrading will cost an estimated 1.6 billion yuan.