China Yitai Coal prices HK offer, to raise about $900mn: IFR

HONG KONG: Chinese coal miner Inner Mongolia Yitai Coal Co Ltd has priced its Hong Kong share offer at the bottom of an indicative range, putting it on course to raise about HK$7 billion ($903 million), IFR reported.

Yitai Coal, which already has B-shares traded in Shanghai, priced the offer at HK$43.00 each, compared with the marketing range of HK$43-53 per share, IFR said, citing two sources familiar with the matter.

That would rank it as the second-largest equity capital markets deal in Hong Kong this year after Chinese stock brokerage Haitong Securities' $1.85 billion stock offer in April.

Yitai Coal's pricing comes after several high-profile Asian fund raisings were put on hold due to choppy markets. Among the offers that were pulled or delayed were the $1 billion Hong Kong IPO by London jeweler Graff Diamonds and a $3 billion Singapore listing from motor-racing business Formula One.

The volatility has caused equity capital market deals in Asia ex-Japan to drop 30.4 percent to $77.9 billion in the first half of the year, with IPO volumes alone tumbling 62 percent.

Yitai Coal is selling 162.8 million new shares and the offer price represents price-to-earnings multiple of 6.7 for 2012, the report added.

Yitai Coal is set to start trading on July 12 and will become the first B-share company to trade in Hong Kong. B-shares, a class of stock traded in mainland China denominated in either US dollars or Hong Kong dollars, were first introduced in 1992 as a way to lure foreign investors to the domestic Chinese equities market.

As more Chinese companies tapped foreign investors through listings in Hong Kong and New York through the years, B-shares lost their lustre. Liquidity in the market dwindled, with no new B-share issuance since 2000, according to IFR, which is owned by Thomson Reuters.

Yitai Coal secured about $390 million from cornerstone investors, helping it to cover more than 40 percent of the offer. Investors included Datang International with a $100 million commitment and $30 million each from Baosteel Resources International and King Link Holding.

BOC International and China International Capital Corp (CICC) acted as sponsors and joint bookrunners with BNP Paribas , Bank of America Merrill Lynch, Macquarie and UBS.