Mainland port firm prepares for HK offering

HONG KONG: China Communications Construction Co, the country's largest port builder, will sell shares worth as much as US$240 million to three investors, paving the way for its imminent initial public offering (IPO) in Hong Kong.

The State-owned company will earmark up to 12 per cent of its public offering for the China Life Group, Hong Kong's New World Development and Singapore's GIC Direct Investments, sources familiar with the deal said on Friday.

"Each of the three investors will take shares worth US$80 million," the source said.

"China Communications Construction invites three influential strategic investors' participation in order to magnify the attraction and influence of its upcoming IPO, a customary practice in recent public offerings," Andrew To, director of Taifook Securities, told China Daily.

The company is expected to raise as much as US$2 billion through the IPO.

China Life Group, the parent company of China Life Insurance, has shown a strong desire to boost its investment returns through purchasing stakes in Hong Kong listings, especially those by mainland groups.

China Life Group bought shares worth a total of HK$6.4 billion (US$820 million) in the listing of China's largest lender, the Industrial and Commercial Bank of China (ICBC), before its massive IPO.

Cheng Yu-tung, chairman of New World Development which has extensive business dealings and real estate interests on the mainland, is a frequent investor in mainland companies' Hong Kong IPOs.

China Communications Construction, whose business includes infrastructure design and construction, initially planned to list simultaneously in Hong Kong and Shanghai, but abandoned the idea due to technical problems involving its A-share public offering.

The company is offering 3.5 billion H shares. An official marketing roadshow will start next Tuesday, while the trading debut is set for December 15.

Following the ICBC's record IPO, Hong Kong's stock exchange will see more mainland IPO fever over the next few months, with the share sale of China Communications Construction, Kingboard Laminates and China Communications Services.

China National Coal, the country's second-largest coal producer, and China CITIC Bank, the mainland's seventh-largest bank by assets, will also join the listing spree later.

Source: China Daily