Chinese School - Sino-Ocean Land to raise HK$12b from share sale

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BIZCHINA / Top Biz News

Sino-Ocean Land to raise HK$12b from share sale

By Bei Hu (China Daily)
Updated: 2007-09-11 09:54

Sino-Ocean Land Holdings Ltd, the property unit of China's biggest
shipping company, is seeking HK$11.9 billion in a Hong Kong share sale as
real estate prices surge on the mainland.

The developer of residential, office and commercial properties in the
northern Chinese Bohai Bay region will offer 1.55 billion shares,
equivalent to a 36.6 percent stake, at HK$6.45 to HK$7.70 apiece.

Och-Ziff Capital Management Group, a New York-based hedge fund manager,
has agreed to buy US$30 million worth of the stock.

Property companies have raised US$3.9 billion in Hong Kong initial public
offerings (IPOs) this year as housing prices on the mainland posted the
fastest increase in almost two years.

"The market still has a lot of interest in property stocks because the
mainland is still lagging in real interest rates," said Kenny Tang, a
director of Tung Tai Securities Co in Hong Kong. "Mainland property
companies' profit margins remain at very high levels, indicating demand
is still strong."

Launching the IPO as late payments on US subprime loans sap international
investor interest in risky assets, Sino-Ocean has reserved a combined
US$240 million of shares for 10 corporate investors, including Och-Ziff
and Hong Kong billionaire Lee Shau Kee. Lee is chairman of Henderson Land
Development Co, Hong Kong's fifth-largest builder by market value.

Hong Kong individuals ordered about 170 times the amount of shares
initially set aside for them in the IPO of Franshion Properties (China)
Ltd last month. Appetite for the sale held up even after concerns about
rising defaults in US subprime mortgages drove down Hong Kong's benchmark
index.

The property unit of Sinochem Corp, the nation's largest chemicals
trader, raised HK$3.81 billion in that share sale.

"Usually, if the market is not stable, players will tend to subscribe to
IPO stocks because the selling pressure is much smaller," making them
more likely to advance than stock in companies that are already traded,
Tang said.

(For more biz stories, please visit Industry Updates)

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