Singapore is expected to raise as much as $157 million, sources close to the deal
said yesterday. The company is currently on a roadshow and has set an indicative
price range of $0.54 to $0.83 a share, the source told Reuters. A second source
said the IPO would be priced on Nov 29 in New York. China Energy plans to sell
176 million new shares and 13 million vendor shares, the sources said. The total
of 189 million shares to be sold is equivalent to about 16 per cent of the enlarged
share capital. If priced at the top end of the range, the company would have a
value of $976 million. ABN AMRO Rothschild is the lead manager for the IPO.
China Energy Ltd said in its prospectus that it is the country's largest producer of
di-methyl-ether (DME), an alternate fuel for liquefied petroleum gas. It produces
DME and methanol in Linyi, in China's Shandong province. The company plans to
use the IPO proceeds to acquire an additional production facility, to boost existing
capacity and for working capital needs. It plans to boost its DME production
capacity to 600,000 tonnes per year by the first half of 2007, from 150,000 tonnes
per year currently following an acquisition.
SINGAPORE - The $160 million (US$104 million) initial public offering for China-based chemicals producer China Energy has been heavily oversubscribed and is due to be priced next week, a source involved with the deal said on Tuesday.
'The order book is looking very good, multiple times covered,' the source said. 'It is more than 10 times covered.'
China Energy -- which plans to sell 176 million new shares and 13 million vendor shares according to its prospectus -- had set an indicative range of $0.54 to $0.83 a share for the IPO, sources said. That would raise between $102 million and $157 million for the company and its vendor shareholders.
The source said the IPO would be priced on Dec 13.
China Energy said in its prospectus that it is the country's largest producer of Di-Methyl-Ether, an alternative fuel for liquefied petroleum gas. It produces DME and methanol in Linyi, in China's Shandong province. -- REUTERS
