Fosun Group

Fosun increases price range of IPO shares

PUBLISHED : Wednesday, 27 June, 2007, 12:00am
UPDATED : Wednesday, 27 June, 2007, 12:00am

Fosun International, a private conglomerate in Shanghai, has raised the price range for its Hong Kong initial public share offering after the institutional portion of the sale was five times oversubscribed on the second day of marketing.

Sources told Bloomberg the range has been revised to HK$6.98 to HK$9.23 from the original HK$6.48 to HK$8.68.

Fosun, whose businesses range from steel to property, pharmaceuticals, retail and financial services, is marketing its 1.25 billion shares or 20 per cent of its enlarged share capital in a bid to raise up to HK$11.54 billion.

The company plans to use 40 per cent of the proceeds to repay bank loans and 35 per cent to invest and buy assets in the steel, pharmaceuticals, financial services and retail industries.

It also plans to use 15 per cent of the proceeds for investment and acquisitions in the raw materials suppliers industry, especially iron ore and coking coal assets, according to its preliminary prospectus.

The remainder will be used for general working capital.

Fosun, which owns stakes in Zhaojin Mining Industry, Shanghai Forte Land, Nanjing Iron & Steel, Shanghai Fosun Pharmaceutical and Shanghai Yuyuan Tourist Mart, forecast that this year profit would double to at least 2.15 billion yuan from 1.09 billion yuan last year, the prospectus said.

The company planned to distribute 30 per cent of its profit as dividend this year, it said.

Dubbed 'China's Hutchison Whampoa', Fosun has attracted 11 cornerstone investors to buy a combined US$220 million worth of the new shares on offer.

The cornerstone investors have agreed not to sell their shares within six months after the listing. They include Li Ka-shing, Lee Shau-kee, the Government of Singapore Investment Corp and China Life Insurance.

The retail tranche will open from Friday to July 5.

The final pricing will be determined on July 6, and trading will begin on July 16.

Morgan Stanley, UBS and China International Capital Corp are arranging the share offering.

Going to market

The number of new shares that Fosun International is selling 1.25b