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Magang to keep HK flotation 'simple'

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MAANSHAN Iron and Steel, one of the nine mainland companies to list in Hong Kong, will launch a private placement for international investors and a public offer for local investors next month.

The move follows the controversy over Shanghai Petrochemical's complicated offering structure earlier this year.

''In order to simplify the issue, Maanshan Iron and Steel plans to have about 75 per cent of its new issue offered outside Hong Kong through a private placement,'' said an underwriter who has been invited to join the multi-billion-dollar issue as a sub-underwriter.

Details of the listing have yet to be finalised, but Wardley Corporate Finance, the sponsor and leading underwriter of the issue, has worked out the guidelines.

The steel giant will float 1.7 billion shares in Hong Kong. The issue is expected to be priced between $1.60 and $2.25 a share. The flotation size will be between $2.72 billion and $3.83 billion, which will be used to finance a $3.5-billion expansion plan.

It is understood Hong Kong investors will be offered 25 per cent of the issue, with 25 per cent in the US, 10 per cent in Japan, 25 per cent in Europe and Asia, and 15 per cent for individual investors.

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