Entry of a strategic investor and heavy interest lead to doubling of retail tranche Shares in China Shipping Container Lines (CSCL) were expected to be priced near the top of the indicated range today, after the retail tranche was 50 times oversubscribed and another significant strategic investor emerged. Buoyant demand for shares in China's second-largest shipping company, which begin trading on June 16, has prompted a doubling of the retail tranche to 242 million shares, according to sources. The indicative price range is between HK$3.175 and $4.175 per share. Retail investors committed about HK$25 billion yesterday to buy more than 50 times the amount of shares available. A mechanism outlined in the listing documentation will shift shares from the institutional tranche, boosting the retail tranche to 10 per cent of the offer. A report yesterday said that Seaspan Container Lines, a Canadian shipbroker and financier and part of the Washington Group of Companies, would become a key strategic investor in CSCL. According to the maritime trade journal Lloyd's List, the Canadian firm will be the second-largest investor in CSCL, behind companies owned by Li Ka-shing. Seaspan vice-president Graham Porter confirmed the level of its involvement, according to Lloyds. Sources close to CSCL would not confirm Seaspan's investment yesterday but the company is thought to have committed to an equity stake a few percentage points lower than the combined 14.98 per cent held by Mr Li's Cheung Kong (Holdings) and Hutchison Whampoa. Seaspan is a long-time business partner of CSCL, having brokered ship purchases and financing arrangements during the rapid expansion of the CSCL fleet since the late 1990s. The company has 14 ships on order at shipyards in China and South Korea to be time-chartered to CSCL, including the biggest container vessels ever made. Some of the financiers for those vessels were not disclosed in the CSCL prospectus circulated last week but industry watchers were not surprised to see Seaspan emerge as a strategic investor. Samsung Heavy Industries is building eight 9,600-teu (20-ft equivalent unit) capacity vessels for CSCL, according to Lloyd's, four of which will be fully owned. Four other large vessels will be chartered in, two from Seaspan. The state-owned firm hopes to raise US$1.3 billion, $470 million of which has been earmarked to pare long-term debt, which is forecast to reach 7.9 billion yuan by the end of this year.
