A ship leaves dock from Jiangsu Rongsheng Heavy Industries. [Photo/China Daily]
HONG KONG - Jiangsu Rongsheng Heavy Industries is seeking $2.3 billion in what may be Hong Kong's third-largest initial public offering (IPO) this year, according to terms sent to investors.The company plans to sell 1.75 billion shares at HK$7.30 (94 cents) to HK$10.10, the terms show. China National Offshore Oil Corp, China Life Insurance (Group) Co, China Southern Fund Management Co and Atlantis Investment Management Ltd have agreed to buy a combined $155 million of shares, according to the terms.
Rongsheng intends to use the sale proceeds for projects that include building a fourth drydock, as a rebound in world trade following last year's global recession revives demand for ships. The company, which raised $300 million from investors including Goldman Sachs Group Inc in 2007, planned to sell shares in 2008 before the failure of Lehman Brothers Holdings Inc and the credit crunch triggered a collapse in global stock markets.
Manufacturing continues to expandBOC International Holdings Ltd is arranging the sale, along with CCB International (Holdings) Ltd, JPMorgan Chase & Co and Morgan Stanley, according to the terms sheet.
Rongsheng also plans to use IPO funds to boost marine-engine production and increase capacity for making excavators.
Guangzhou Shipyard International Co, the largest shipyard listed in Hong Kong, has gained 28 percent this year. It trades at about 11 times estimated earnings.
China Shipbuilding Industry Co, the nation's largest maker of vessel equipment, raised 14.7 billion yuan ($2.2 billion) in a Shanghai IPO in December. It gained 34 percent this year.
Shipping lines have begun to resume ordering new vessels after a plunge in demand during the global recession. Evergreen Group and Neptune Orient Lines Ltd, Asia's two biggest container lines, have ordered 32 new ships between them from South Korean shipyards since June.
Bloomberg News
