Two shareholders in Asia Cement reduced their stakes in the Taiwanese cement producer last night, raising NT$3.2 billion ($110 million) after fixing the price at the bottom of the indicative range.
It was a busy night in the equity capital markets in Asia, with a couple of block and CB deals launched in one night. Another block deal in the market was Evergrande Real Estate Group, a Hong Kong-listed large-scale integrated residential property developer in China. It is seeking to raise up to $580 million, or up to $697 million if the upsize option is to be exercised, from a top-up placement.
In Taiwan, Asia Cement’s deal attracted demand from about 30 investors and the book was well covered, a source said last night. It was basically anchored by domestic long-only interest, and the allocation was top-heavy, with a majority of the stock going to a core group of anchor investors, the person noted. The deal was launched at around 5.30pm Hong Kong time and closed about an hour later.
The selling shareholders were Yu Yuan Investment and Bai Ding Investment who sold a combined 90.5 million shares at NT$35.60 each, which represented a 3.5% discount to yesterday’s close of NT$36.90 in Taiwan. The deal was marketed in a price range between NT$35.60 and NT$35.80, which translated into a discount of between 3% and 3.5%.
The deal size of 90.5 million shares was equal to about 2.8% of the company. Of the deal, about 78%, or 70.5 million shares, was sold by Yu Yuan and the remaining 22%, or 20 million shares, was offloaded by Bai Ding, according to a term sheet.
Prior to the transaction, Yu Yuan held about 5.3% of the company and Bai Ding owned about 1.8%, the source said, adding that Yu Yuan’s stake is now reduced to 3% and Bai Ding’s share is cut to 1.2%. Yu Yuan and Bai Ding are related to Far Eastern Group, the parent of Asia Cement.
There is a 90-day lock-up for the selling shareholders, Far Eastern Department Store and Far Eastern New Century, according to the term sheet.
Asia Cement’s stock was down 0.8% yesterday, after rising about 13% last year. The Taiwan Stock Exchange Weighted Index, which was also down 0.8% yesterday, gained about 8.9% in 2012.
Asia Cement was established in 1957 to meet the needs of Taiwan’s economic development, and the company’s stock was listed in 1962, according to the Taiwan Stock Exchange’s website.
Asia Cement has complete production and sales channels in Taiwan, and has representative offices in Hong Kong and Singapore, according to the company’s website. It notes that the company is also expanding into the world market, exporting cement to North America, Africa, the Middle East and Southeast Asia, and it was the first Taiwanese company to invest in the Chinese cement business in 1995.
For the nine months to September 30, 2012, Asia Cement booked NT$8.6 billion in net sales and NT$4.9 billion in net income.
BNP Paribas and Goldman Sachs were joint bookrunners for the deal.
Evergrande Real Estate
While some other Chinese property companies have successfully tapped the bond market so far this year, including Shimao Property and Country Garden, Evergrande decided to raise funds from a top-up share placement yesterday.
The official pricing for Evergrande’s deal was not available as of late last night. But the property developer was offering 1 billion new shares for a price range between HK$4.35 and HK$4.50 each, which could raise between $561 million and $580 million, according to a term sheet. The price range represented a discount of between 3.2% and 6.5% to yesterday’s closing price of HK$4.65.
Evergrande had an option to increase the deal to 1.2 billion shares, and if the upsize were to be exercised, the total size could be increased to between $673 million and $697 million.
There is a three-month lock-up on Evergrande and Xin Xin (BVI), which is Evergrande’s controlling shareholder and selling entity, according to the term sheet. Evergrande plans to use the proceeds for the repayment of the current debt and general corporate purposes.
Evergrande’s stock rose 2% yesterday, after gaining about 32% last year. The Hang Seng Index was down 0.1% yesterday, but rose about 23% in 2012.
For the full year of 2012, the group’s aggregate contracted sales amounted to Rmb92.3 billion, equivalent to 115.4% of the full-year contracted sales target of Rmb80 billion, and it was an increase of 14.8% from 2011, Evergrande said in a statement earlier this month.
Its contracted sales target for 2013 will be Rmb100 billion, and the company said in a separate statement that “the Group has full confidence in achieving this target and will continue to maintain its position as the leading high quality property developer with standardised operations in China”.
Bank of America Merrill Lynch, Deutsche Bank and BOCI were joint bookrunners for the deal.
