DEAL NEWS: After posting the slowest first quarter in almost a decade, Hong Kong's capital markets are once again in full swing, or at least, the closest we are likely to get to it in the middle of a worldwide economic crisis.
The latest companies seeking to cash in on the Hang Seng's purple patch- one that has seen it surge almost 50% in the last three months due to renewed inflows into regional funds- are 361 Degrees International, a Fujian-based sportswear manufacturer, and BaWang International, China's largest herbal shampoo maker. The offerings will raise in excess of HK$4bn and are set to be the second and third largest offerings on the Hong Kong exchange this year at closing, outranked only by China Zhongwang's HK$9.8bn sale earlier this year.
361 Degrees' IPO listing is expected to raise close to HK$1.8bn and will include a US Rule 144A placement. The offer represents a global offering of 500 million new shares which equates to a 25% stake. The company retained Orrick partners Edwin Luk and David Cho for US and HK law advice, Tian Yuan and Conyers Dill & Pearman for Cayman Islands law advice. The underwriters—Bank of America's Merrill Lynch Unit and CCB International Capital Limited—were represented by Fried Frank on US and HK matters and Jingtian & Gongcheng on PRC law.
BaWang plans to as much as HK$1.67bn from its listing by offering 700 million new shares for HK$1.95 to HK$2.38 each. The company tapped Herbert Smith for US and HK law advice, King & Wood for PRC advice and Conyers Dill & Pearman was again called on by a company on the cusp of listing to advise on the laws of Cayman Islands. The offer underwriters, HSBC and Morgan Stanley, are being represented by Freshfields as to HK and US law and Commerce & Finance for PRC law advice. Both companies are expected to start trading later this week.
For more coverage on the rebound of Hong Kong's capital market see the July issue of ALB.
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