KKR-backed Tianrui raises $124m in Hong Kong IPO

Tianrui, located in Henan and Liaoning provinces, priced 400.9 million new shares at the bottom of the range at HK$2.41 apiece - equivalent to a 2012 price-to-earnings ratio of 2.39x.

Nevertheless, sources cited by FinanceAsia said that the deal was around 1.5x covered, with most of the shares allotted to 25-30 institutional and corporate investors. All the buyers were reportedly long-only type accounts from China and Hong Kong, including alternative asset funds and qualified domestic institutional investor vehicles.

The value of the floatation could increase to as much as $143 million if the 15% greenshoe allocation is exercised in full.

The international securities units of three of China's largest banks - Bank of China, Bank of Communications and China Construction Bank - acted as joint global coordinators for the listing alongside Deutsche Bank.

KKR's $112 million investment in Tianrui in 2008 is seen as part of a strategy to target a fragmented sector in need of consolidation.

While data from Dealogic suggests that Hong Kong will be the top global destination for new offerings in 2011 for the third year running, few companies have in fact succeeded in listing in recent months. Notable exceptions to this include New China Life Insurance, backed by Standard Chartered Private Equity, whose share price fell by nearly 10% on its first day of trading, and Sitoy Group, whose IPO received a cornerstone investment of $21 million from IDG Hub Partners.

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• Topics
• Expansion
• Greater China
• Industrials
• China
• CCB
• BoCom
• IPO
• Growth capital