Wah Kwong scraps IPO over valuation row
Wah Kwong Maritime Transport Holdings, a shipping firm owned by George Chao Sze-kwong, has scrapped its up to HK$1.27 billion initial public offering as the company and the deal's arrangers failed to agree on valuation, sources said.
The shipping firm confirmed in a Hong Kong stock exchange filing yesterday that it pulled the deal, citing the current weak market conditions and volatility in the international capital markets.
'The company wouldn't want to sell cheap as it is cash-rich,' a source said.
'The institutional book was well covered by more than 60 investors, most of them are good quality accounts.'
It would 'attempt to come back to the market if investors turn more positive to shipping offerings', the source added.
Cazenove was the sole global coordinator of the offering.
Despite the weak market, other companies are ploughing ahead with their offerings including mainland hot-pot restaurant operator Little Sheep Group and Chongqing Machinery & Electric.
Little Sheep priced its shares at HK$3.18 each, the middle of the indicative range of HK$2.68 to HK$3.68, to raise about HK$779.7 million, sources said.
'More than US$2.5 billion worth of orders have been placed on the company's institutional tranche while its retail portion has been about 50 times covered,' said a source.
The clawback mechanism had been triggered to lift shares allocated for the company's retail portion from 10 per cent to 40 per cent of the total, or 245.19 million shares, the sources said.
The company is expected to start trading its shares at the Hong Kong bourse on June 12.
Chongqing Machinery & Electric, on the other hand, might set its initial offering price at the bottom after receiving 'moderate' response from institutional and retail investors.
'The company's shares placed on the institutional tranche have been fully covered while those set aside for the retail tranche have been more than five times subscribed,' a source said.
Chongqing Machinery, the country's largest industrial conglomerate in the west, is offering 1 billion H shares at HK$1.30 to HK$1.70 each.
Trading of the company's shares on the main board of the Hong Kong stock exchange is scheduled for June 13.
Meanwhile, sportswear retailer Pou Sheng International (Holdings) and mainland developer Central China Real Estate will start trading their shares on the main board today.
According to advanced over-the-counter trades, provided by Phillip Securities yesterday, Pou Sheng's shares traded at HK$3 each, 1.64 per cent down from its offering price of HK$3.05.
Shares in Central China Real Estate were the same as the offering price of HK$2.75 in the grey market.
The two companies have raised a combined HK$3.89 billion from their deals after pricing the shares at the lower end of the indicative ranges.
