Sinotrans Shipping Ltd may raise as much as HK$11.45 billion (US$1.5 billion) in a Hong Kong initial public offering that has drawn United States hedge fund Citadel Investment Group LLC, said three people familiar with the sale.
The dry-bulk shipping company plans to offer investors 1.4 billion new shares at HK$7.18 to HK$8.18 each, said the people, who declined to be identified before an official statement, according to Bloomberg News.
The sale may be expanded another 15 percent to meet demand and stabilize the share price.
The shipping line aims to expand its fleet because surging imports of coal and iron ore in China and India have allowed bulk shippers including Pacific Basin Shipping Ltd and STX Pan Ocean Co to more than double rates over the past year.
A lack of shipbuilding capacity is likely to restrain growth in the global fleet, Pacific Basin said last week.
"This is a very good year for dry-bulk shipping and Sinotrans chose the right time to do their IPO," said Roslyn Ji, an analyst at Core Pacific-Yamaichi International Ltd in Hong Kong. "The global dry-bulk market will continue to prosper over the next three years as demand for commodities is very strong from China and India."
The sale of a 35 percent stake in the IPO values the Hong Kong-based unit of China National Foreign Trade Transportation (Group) Corp, also known as Sinotrans Group, at as much as US$4.2 billion, the people said.
(Shanghai Daily November 6, 2007)
