Shenzhen International Holdings successfully launched a share placement in Hong Kong late Tuesday, raising $250 million in the process after selling 176 million new shares.
The company, which is partially owned by the municipal government of Shenzhen and acts as its holding company for infrastructure projects, had initially sought to price 105 million shares at between HK$10.93 to HK$11.23 per unit in order to raise $150 million.
The price range for the follow-on offering represented a discount of up to 9.1% compared with Shenzhen International's November 2 closing price of HK$12.02, according to a term sheet.
But decent demand led to an upsize option being exercised, boosting the number of shares on offer to 176 million, bankers close to the deal told FinanceAsia.
Shares priced a few hours after the placement launched at HK$11 per unit, an 8.5% discount to November 3's closing price.
The deal under the lead of UBS, JP Morgan and Morgan Stanley was covered multiple times, with more than 100 lines participating in the book, bankers said. Investors were roughly split between long-only institutional investors and hedge funds, the majority of them in Asia, and to a lesser extent the US and Europe.
Allocations were still being sorted out late in the Asian day although the top-10 investors took up the bulk of the deal.
Infrastructure and logistics
Shenzhen International has a 30% stake in Shenzhen Expressway and benefits from the heavy cargo traffic between Hong Kong and Shenzhen. It also operates logistics parks for loading and unloading cargo and for the transfer of goods from large to small trucks.
The company and its underlying subsidiaries in the first half of 2014 reported an 18% year-on-year rise in revenues to HK$3.3 billion ($425.7 million).
Shenzhen International's shares are up 20% so far this year and the company is trading at 9.79 times 2014 earnings.
The company has been seeking acquisition opportunities in China for a number of years. It raised HK$600 million in a zero-coupon five-year convertible bond in January 2006 and at the time said the proceeds would go towards acquiring infrastructure projects on the mainland.
In late October, Shenzhen International’s management announced a redevelopment plan on a 611,000 square metre land parcel in Longhua. It is the company’s third on-going project.
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