Shanghai Pharmaceuticals Enlarges IPO Plan

Following the recent rebound in Hong Kong shares, Shanghai Pharmaceuticals Holding Co. has increased the size of its planned initial public offering in the city to between US$1.5 billion and US$1.8 billion from the earlier US$1.2 billion, a person familiar with the situation said Friday.

With the planned offering Shanghai Pharmaceuticals joins several other companies preparing to list in Hong Kong in the second quarter. Word of the company's decision to increase the deal size followed a 2.8% rise over the past week in the Hong Kong exchange's benchmark Hang Seng Index helped by a rebound in U.S. markets, which just finished their best first quarter in more than a decade.

The Shanghai-listed company plans to sell shares in Hong Kong at no less than 17.6 yuan ($2.69) each, the person said. Its Shanghai shares were recently at 19.4 yuan, down 0.8% for the day.

If the Hong Kong Stock exchange's listing committee approves the company's planned listing in early April, Shanghai Pharmaceuticals aims to start trading in the city by the end of the month, another person familiar with the situation said Friday.

The company has hired Credit Suisse Group, Deutsche Bank AG, Goldman Sachs Group Inc. and China International Capital Corp. to handle the Hong Kong listing, the people said.

A number of companies are looking to raise funds on Hong Kong's stock market, which last year topped the global list of venues for new share offerings, as measured by the amount raised.

Chinese chemical-fiber manufacturer Billion Industrial Holdings Ltd. plans to raise US$400 million to US$500 million ahead of a listing in Hong Kong, other people familiar with the situation said earlier. China Flooring Holding Co., a flooring manufacturer, plans to raise between US$200 million and US$300 million and will seek listing approval in mid-April, another person earlier. Lhasa-based mineral-water producer Tibet 5100 Water Resources Holdings Ltd. plans to raise US$200 million to US$250 million, and is set to seek approval in April, another person said earlier.

Far East Horizon Ltd. said Thursday it exercised an overallotment option for its Hong Kong initial public offering, bringing the total net proceeds from the deal to US$723 million.

Far East Horizon, a financial-leasing unit of state-owned Sinochem Group, said it sold an additional 15% on top of the 816 million shares initially offered at the IPO price of HK$6.29 (81 U.S. cents) each. Far East Horizon's shares closed up 9.2% at HK$6.87 on their first day of trading in Hong Kong on Wednesday. In midday trading Friday, they were at HK$7.55, up 5.3%.

The company raised US$658 million before the overallotment option was exercised by pricing its IPO in the middle of the indicative price range.