IFR Asia – January 20, 2018

COUNTRY REPORT CHINA

There is a 45-day lock-up on the
company.
JP Morgan was the sole placing agent.

› TWO FIRMS COMPLETE PLACEMENTS

JIANGSU ZHONGLI GROUP has raised Rmb3.11bn
from a private placement of 233m shares to
six investors.
The price was set at Rmb13.35, or
at a discount of 7.1% to the pre-deal
spot. Securities companies and asset
management companies were the main
buyers.
Huatai United Securities was the sponsor.
The wires and cables maker plans to use
the proceeds for a photovoltaic power plant
project and working capital.
HANGZHOU SILAN MICROELECTRONICS has
raised Rmb732m from a private share
placement, with Citi Orient Securities as sole
bookrunner.
The electronic components manufacturer
sold 65m shares at Rmb11.28 each, or at a
discount of 25.2% to the pre-deal spot.
The placement shares were sold to six
investors, including mutual funds and
corporate funds.
Proceeds will be used to expand output.

› APPROVALS FOR THREE PLACEMENTS

SINOPEC OILFIELD SERVICE has received written
China Securities Regulatory Commission
approval for its proposed Rmb8bn private
placement of A-shares and H-shares.
The provider of oil-and-gas services plans
to raise up to Rmb4bn from the placement
of not more than 2.83bn new A-shares to
stockholder China Petrochemical Corp for
Rmb3.94bn, and a senior-executive share
scheme for Rmb60.65m. The placement
price will be set on the first day of
issuance.
There is a 36-month lock-up on the
subscribers.
Sinopec Oilfield also intends to raise

a maximum of Rmb4bn from a private

placement of H-shares to not more than 10

investors.

The company plans to place up to 4.2bn

H-shares at HK$1.35 each. Century Bright, a

subsidiary of CPC, has agreed to subscribe

to at least 50% of the new H-shares, while

China Structural Reform Fund will take up

Rmb800m.

There is a 36-month lock-up on Century

Bright.

Proceeds will be used for working capital.

CICC , Deutsche Bank , Guotai Junan Securities

and CLSA are joint placing agents for the

H-share tranche. CICC is the sponsor for the

A-share tranche.

BEIJING CAPITAL has cleared a CSRC hearing

for a proposed private share placement of

up to Rmb4.11bn.

The water services company plans to

make available up to 964m shares at a floor

price to be set on the first day of issuance.

China Securities is the sponsor of the

placement. Proceeds will be used for water-

treatment and supply projects, as well as

for working capital.

The deal still needs written CSRC

approval.

HUBEI XINGFA CHEMICALS GROUP has received

written approval from the CSRC for a

proposed private share placement of up

to Rmb1.4bn. The supplier of phosphorus

chemical products plans to place not

more than 129m shares at a floor price of

Rmb10.89. Changjiang Financing Services is the

sponsor.

› BANK OF CHENGDU SEALS IPO

BANK OF CHENGDU has raised Rmb2.52bn from

a Shanghai IPO of 361m shares, or about

10% of its enlarged capital, at Rmb6.99

each.

The issue price is equal to historical

book value and at a premium of 32% to

the average valuation of listed peers in the

banking industry.

The institutional tranche was covered

about 571 times, while the retail part was

covered 2,167 times before clawback. After

clawback, 90% of the IPO shares were sold

to retail investors.

China Securities was the sponsor. Proceeds

will be used to strengthen the bank’s

capital base.

› KHAZANAH SELLS ISLAMIC EB

Malaysian sovereign wealth fund Khazanah

Nasional has raised US$320.8m from

zero-coupon Islamic exchangeable bonds,

according to a pricing term-sheet.

The bonds, or sukuk, with a tenor of five

years and an investor put after three years,

are exchangeable for the H-shares of CITIC

SECURITIES.

The sukuk was offered with a yield-to-

maturity of 0% and an exchange premium

of 35%–40% over the reference price of

HK$18.9722. The premium was set at the

top of the range.

According to a statement from Khazanah,

the books were 5.5 times covered with

78 investors, comprising long-only funds,

hedge funds, arbitrage funds and asset

managers across Asia and Europe.

More than half of the demand came from

outright investors.

The recent strong run-ups in share

prices of Chinese brokerages have drawn

investors’ attention to the issue. Investors

are also comfortable with Khazanah’s name

and credit given that it is a regular issuer.

CIMB and JP Morgan were joint

bookrunners.

Credit spread was assumed at 85bp, bond

floor at 91, implied volatility at 29 versus

historical volatility of mid-20s.

› CHANGSHU BANK SELLS RMB3BN CB

JIANGSU CHANGSHU RURAL COMMERCIAL BANK has

launched a Rmb3bn offering of six-year

convertible bonds.

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