Sunday, April 19, 2009

Zhongwang Seeks $1.6 Billion in 2009’s Largest IPO

China Zhongwang Holdings Ltd. plans to raise as much as HK$12.32 billion ($1.6 billion) in the world’s largest initial public offering this year, according to a share sale document to investors.

The nation’s biggest maker of extruded aluminum products by capacity is offering 1.4 billion new shares at HK$6.80 to HK$8.80 each, said the e-mailed document. Makers of aluminum extrusion products use extrusion presses to process the metal into various shapes and formats for industrial and construction use.

Six consecutive weeks of rally in global equities have emboldened companies to consider selling new shares again. The financial crisis last year forced more than 300 companies worldwide to put stock offerings on hold and led to the slowest first-quarter for Hong Kong IPOs in a decade, according to data compiled by Bloomberg.

Hong Kong’s Hang Seng Index surged 21 percent in the month to April 17. Funds raised in first-time stock sales in Hong Kong dropped to HK$1.3 billion in the first quarter following the benchmark index’s 48 percent slump in the sharpest annual decline since 1974, according to Bloomberg data.

At the top end of the offered share price, Zhongwang’s IPO would be nearly twice the size of this year’s largest first-time public stock offering so far -- the $828 million share sale of Mead Johnson Nutrition Co., a former unit of Bristol-Myers Squibb Co. in February.

It would also be the largest Hong Kong IPO in a year, after the HK$20.2 billion stock offering of China Railway Construction Corp. in March 2008.

Citic Securities Co., JPMorgan Chase & Co. and UBS AG are managing the sale.