Hengan International Group executive director Stan Yue Wai-leung says about 400 international funds, including one controlled by US billionaire George Soros, have subscribed for shares in the firm's HK$700 million flotation. The sanitary towel maker sold 90 per cent, or 225 million new shares, of the offer at HK$2.80 a share through an international placement during three days ending last Wednesday. The remainder of the shares are being sold to the public in Hong Kong until next Wednesday. Sources said the placement was about 11 times oversubscribed, with Mr Soros' fund subscribing for up to 22.5 million shares, or 10 per cent of the placement, for HK$63 million. Having completed a six-day roadshow in Europe and Asia, Mr Yue said that pension funds of British Airways, British Petroleum and Scottish Mutual fund are among the groups which have subscribed for Hengan shares. 'We also saw subscription from investors in the US such as Soros,' he said. In Hong Kong, brokers said the warm response from overseas investors helped boost demand for the stock. They said Hengan had a grey market price of HK$3 yesterday compared with the issue price of HK$2.80 a share. Local subscription might not be as strong as overseas investors because of tight financing by brokerages. One fund manager said Hengan was less vulnerable to any economic downturn as it manufactures and sells sanitary napkins and disposable baby napkins - necessities - in the mainland. However, he said the company was exposed to risks such as prices of fluff pulp - a key ingredient - and competition within the mainland. Mr Yue said prices of fluff pulp had remained stable this year after almost halving from the peak in 1995 at about US$1,000 per tonne. Fluff pulp and another key material, super absorbent polymer, accounted for 30 per cent of material cost, he said. Mr Yue played down the potential impact of competition on the company, saying about 30 out of 1,000 market players in the mainland had gone out of business since the onset of the Asian crisis.
