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Brokerage Shenwan Hongyuan seeks up to HK$9.8b in Hong Kong listing

Hong Kong

SHENWAN Hongyuan Group Co, China's sixth largest brokerage by market value, is seeking to raise as much as HK$9.8 billion (S$1.7 billion) in a Hong Kong listing.

The company is offering 2.5 billion shares at HK$3.63 to HK$3.93 apiece in the share sale, according to terms for the deal obtained by Bloomberg. It aims to price the offering on April 18 before beginning trading on April 26, the terms show.

A US$1.3 billion deal would be the largest first-time share sale in Hong Kong this year amid a relatively slow start, according to data compiled by Bloomberg. Companies have raised US$2.7 billion via first-time share sales in Hong Kong this year, compared with US$3.1 billion during the same period last year, the data show.

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The offering has attracted 13 cornerstone investors which agreed to subscribe for a total of about US$829 million of stock, or about 69 per cent of the base offering assuming mid-point pricing, the terms show.

The asset management arm of Industrial and Commercial Bank of China Ltd agreed to invest in US$300 million of shares, while Huaxia Life Insurance Co will buy US$100 million of them, the terms show. China Life Insurance (Group) Co and China Reinsurance (Group) Corp are also among the cornerstone investors.

Shenwan Hongyuan plans to use some of the proceeds to develop its securities business and international business, as well as making principal investments, according to a preliminary prospectus.

The brokerage's Shenzhen-listed shares jumped 14 per cent in the past year, while the CSI 300 Index rose 3.4 per cent during the same period. Shenwan Hongyuan Capital, Goldman Sachs Group Inc, ICBC International Holdings Ltd and ABC International Holdings Ltd are joint sponsors for the Hong Kong share sale, the prospectus shows. BLOOMBERG