China Baosteel Hopes to Raise 7.5 bln Yuan in IPOBaoshan Iron and Steel Co Ltd, the listing vehicle of China's largest steelmaker, hopes to raise about 7.5 billion yuan ($900 million) through its domestic IPO, securities industry sources said on Wednesday.In China's biggest domestic issue ever, Baosteel tentatively planned to price its initial public offering of 1.88 billion A shares -- reserved for Chinese investors -- at about four yuan each, they said. But the IPO could be delayed until November from the earlier planned October date as the steelmaker must still supply documents to market regulators, they said. Regulators also may want to give the market time to digest the impending IPO of up to 4.2 billion yuan by private Minsheng Bank, they said. "Baosteel hopes to sell its shares at more than four yuan each, but we think it is a bit aggressive due to the giant offering size," one securities source said. "Most brokers suggest the IPO should be priceD at less than four yuan. So the final price could be about that level," he said. Baosteel officials declined to comment. China International Capital Corp, the lead underwriter, was soliciting price bids from domestic securities companies, inviting them to co-underwrite the huge steel company's IPO, the sources said. CICC officials were not immediately available for comment. If 7.5 billion yuan were raised, Baosteel's offer would fall short of earlier analyst estimates of 10 billion yuan, but it would still be the biggest IPO in China. "The IPO could be delayed until sometime this November because Baosteel may have to supply some new documents to the CSRC for final review," said another securities source, referring to the China Securities Regulatory Commission. Company officials have said Baosteel also planned a global offering of about $1 billion later this year. That plan was slated for July, but volatility on global markets forced a delay. Sources close to the company said in late September it would proceed with plans to list in Hong Kong and New York in a bid to raise the international profile of a company aiming for the Fortune 500. Concerns that launching the Baosteel offering at the same time as Minsheng Bank's would swamp the A share market could also be one of the major reasons for a delay of Baosteel's issue, the sources said. "The market cannot afford to absorb two huge IPOs within a too short a time period," the second source said. Minsheng Bank, China's only private bank, plans to raise up to 4.2 billion yuan ($507.4 million) from an IPO of 350 million A shares as early as this month, securities and banking industry sources said on Wednesday. Banking sources said that planned IPO could exceed the four billion yuan offering by Pudong Development Bank , one of the biggest domestic IPOs, if market conditions allowed Minsheng to price its shares at the high end of the range. |
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