Resources giant Anglo-American has agreed to buy US$150 million in shares of Shenhua Energy's upcoming initial public offering but will remain largely a financial investor and get no specific business agreements in return for its support, according to market sources. The mainland's largest coal producer is also in advanced talks with four or five other parties and is expected to set aside US$500 million to US$650 million for strategic investors, including Anglo-American, before starting the book-building with institutional investors, they said. While not as large as the strategic investments secured by some state-owned companies in the past, these commitments should instil confidence among other investors. Shenhua's initial public offering will be Hong Kong's largest since China Life Insurance raised $26.7 billion in December 2003 and comes as the equity market has been stuck in a range for months on concerns over global growth and the impact of a reversal of 'hot money' inflows. Anglo-American's investment, first flagged by the South China Morning Post four weeks ago, will leave it holding between 0.9 and 1.1 per cent of Shenhua. Meanwhile, a spokeswoman for Henderson Land Development said the private investment vehicle of chairman Lee Shau-kee was interested in taking a strategic stake. A Citic Pacific spokesman also confirmed his company's intention to buy into Shenhua, saying details would be revealed today. Sources also said Chow Tai Fook Enterprises' Cheng Yu-tung and Kerry Properties might make a pre-flotation investment. No one at both companies was available to comment. Shenhua has all but decided to delay the A-share portion of its flotation because of weak mainland markets, following a similar decision by the Bank of Communications (Bocom) last week. Sources said a decision to delay Shenhua's Shanghai listing would not affect the size of the H-share offer, which will account for 18 per cent of the company, or between US$2.5 billion and US$3 billion. That offer is expected in the second week of next month. Shenhua was initially planning to sell an additional 7 per cent of the company through A shares and was seen neck and neck with Bocom to be the first mainland company to manage a simultaneous listing of A and H shares. But mainland regulators were believed to have given Shenhua and Bocom the nod to wait for a more suitable market environment before proceeding with their offers, people familiar with the issue said. The Shanghai A-Share Index has dropped a further 2.9 per cent this week on a government plan to offload state-held shares, taking it 11.3 per cent lower so far this year. 'Shenhua is expected to set aside US$500m to US$650m for strategic investors'