Sany is aiming for billions in stock offering

Date:2011-09-21qulina  Text Size:

SANY Heavy Industry, China's largest construction machinery maker, aims to raise up to US$3.33 billion in what could top Prada's US$2.5 billion stock offering in Hong Kong in June.

Sany's offering comes on the heels of a slew of deals on Hong Kong's equity market last week after nearly two straight months of drought in share sales as investors shunned turbulent global markets.

The company is offering 1.34 billion shares for between HK$16.13 and HK$19.38 - total offer value up to HK$25.97 billion (US$3.33 billion), a term sheet showed yesterday.

The sale would be the biggest since commodities trader Glencore raised nearly US$10 billion in a dual listing in Hong Kong and London, and would top a US$2.5 billion initial public offering by luxury goods maker Prada in June.

Zou Runfang, an analyst at China Galaxy Securities, said: "Selling H shares would help Sany build its international branding and would play an important role in accelerating its exports and international expansion. However, current market sentiment may hurt demand in the short term."

Sany, often referred to as China's Caterpillar, and rival XCMG Construction Machinery have benefited from China's construction boom.

Sany's Chief Executive and founder Liang Wengen has been listed by Forbes as the Chinese mainland's richest man, with an estimated wealth of US$9.3 billion.

Such offerings could open the way for other large deals.

Chinese consumer companies, including tea producer Tenfu Holdings, recently launched US$485 million worth of IPOs in Hong Kong.

China's share of global sales of construction machinery has grown to 40 percent last year from just 5 percent in 2005, driven by a 15 percent compounded annual growth in China's gross domestic product from 2000 to 2010. Sany has a market value of about US$18 billion. Shares are to start trading around October 3.
 

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