Atr China Ltd., the nation’s largest international carrier, increased the amount it raised in its initial public offering to HK$9.6 billion (US$1.2 billion) after investors ordered more stock than available in the share sale.

Air China sold an additional 421 million shares to institutional investors at HK$2.98 each Friday, the same as their IPO price, the airline said in a statement to the Hong Kong stock exchange Monday.

The over-allotment represents 15 percent of the 2.8 billion shares originally sold.

Institutional and retail investors ordered about 19 times the number of shares originally offered in the share sale, allowing the Beijing-based carrier to price the stock at the high end of a target range.

Air China shares, which reached a high of HK$3.25 in their debut Dec. 15, are now trading below their IPO price.

“The stock’s performance has been affected by the market,” said Gary Zhang, an analyst at Sun Hung Kai Securities Ltd. in Hong Kong. Hong Kong’s benchmark Hang Seng Index has lost 5 percent this year. “The company has good fundamentals and its performance will be better in the longer term.”

Air China shares closed Monday unchanged at HK$2.80, or 6 percent below their IPO price, in Hong Kong.

Air China is now 24 percent-owned by public shareholders after the additional stock sale. China International Capital Corp. and Merrill Lynch & Co. arranged the sale.

Cathay Pacific Airways Ltd., Asia’s sixth-largest airline, bought an additional 38.3 million shares in Air China, the statement said. Hong Kong-based Cathay Pacific paid a total HK$2.8 billion for a 10 percent stake in Air China.

(Xinhua News Agency January 13, 2005)