Hong Kong's third initial public offering of the year was close to collapse yesterday as investors shunned shares in Shandong International Power Development (SIPD), according to the issue's underwriters. Attempts by mainland-linked companies Heilongjiang Agriculture and Zhujiang Steel Pipe to float in Hong Kong earlier this year also failed, calling into question the SAR's role as a capital-raising centre for mainland firms. Underwriters yesterday confirmed SIPD's issue had been poorly received, with none of the underwriting syndicates, excluding sponsor Goldman Sachs (Asia), receiving a single order for its international tranche as of yesterday. They believed only a handful of orders were received for the public tranche. 'It's a nightmare,' one said. 'The chances of proceeding are not looking good,' one underwriter said. A fund manager said: 'It's no longer a matter of pricing, but weak market sentiment. Investors are unwilling to take positions.' A Goldman Sachs spokesman rejected speculation that the listing would be cancelled. Peter Rose, director of corporate communications, said: 'Right now, the initial public offering is on track.' He did not comment further. However, the company indicated yesterday it might not proceed. 'If, for any reason, the issue price is not agreed between the company and Goldman . . . the new issue and the international offering will not proceed,' it said. The lacklustre response is the latest indication of the souring of international investor sentiment towards mainland companies following the collapse of Guangdong International Trust and Investment Corp. In a last-ditch attempt to attract investors, the offer was extended to Monday from yesterday and it is understood fund managers were offered shares on Thursday at a lower issue price of $1.20 a share, but to no avail. The figure is 13 per cent lower than the bottom of its original pricing range of $1.38 to $1.73 per share. It is understood fund managers were bargaining for an even lower price. However, Shandong International had maintained its original pricing range of $1.38 to $1.73 a share, fund managers said. 'They found out that discounts were not helping the sale, so why make the discount?' one fund manager said. The company had been hoping to raise up to $2.19 billion. Market sources said Southern Co of the United States could increase its indirect strategic stake in Shandong International to 50 per cent from 40 per cent of the new shares due to the poor reception. 'The people at Southern are extremely unhappy, because they have found themselves involved in a dog deal.' Mr Rose had no comment. He also declined to say whether Goldman or its underwriting syndicate would take up any outstanding shares in case of insufficient subscription. Fund managers said the listing had been ill-timed and came amid difficult market conditions. The bad reception also marks another dismal chapter in SIPD's listing history, having tried to list in Hong Kong twice previously. Its most recent attempt in 1997 was derailed by poor market conditions. The company owns and operates two coal-fired power plants in the province, with a combined installed capacity of 3,625 megawatts, or 21.5 per cent of Shandong's capacity in 1997.