WESTERN Mining Co raised the maximum 6.2 billion yuan (US$816.4 million) from an initial public offering in Shanghai, pricing stock at the top end of an indicative range, according to Bloomberg today.
The company, based in Xining, Qinghai, sold 460 million new shares at 13.48 yuan each, it said in a statement today, after giving a price range of 12 yuan to 13.48 yuan on Monday. UBS AG's joint venture in China, UBS Securities Co, arranged the sale, the first in China for Europe's biggest bank by assets.
Companies in the world's fastest-growing major economy are raising funds through stock sales to try and benefit from a tripling of the country's benchmark CSI Composite Index in the past year. They have sold almost 124 billion yuan worth of shares in Shanghai and Shenzhen so far this year, compared with 171 billion yuan in all of 2006, according to Bloomberg data.
The ``high subscription rates and top-end pricing show investors believe investing in China's IPOs is a no-risk and high-return investment,'' said Fan Hongyu, an investment manager at China Jianyin Investment Securities Co in Shanghai. ``The shares always jump above their IPO prices on their debuts.''
Institutions and mainland individuals ordered 1.51 trillion yuan worth of Western Mining shares, or almost 244 times the amount on offer, the company said. The pricing at the upper end of the range values the stock at 20.87 times 2006 earnings based on the enlarged share capital, it said.
Western Mining, a Chinese producer of zinc, copper and lead, plans to use the stock sale's proceeds to fund plant upgrades, pay for takeovers and repay bank loans, according to the sale prospectus. Profit at China's second-largest maker of lead concentrate, tripled to 1.54 billion yuan last year as metals prices surged, the prospectus said.