Sept. 15 (Bloomberg) -- Dah Chong Hong Holdings Ltd., a Hong Kong-based automobile and food distributor, and parent Citic Pacific Ltd. may raise as much as HK$4.3 billion ($552 million) in net proceeds from an initial public offering of the unit.

The offer will comprise 601.2 million existing Dah Chong Hong shares held by its parent, and 180 million new shares, Citic Pacific said in a statement to Hong Kong's stock exchange yesterday. The price of the offer will be determined later, the statement said.

The share sale may value Dah Chong Hong at HK$10.58 billion, Citic Pacific said in the statement, citing figures provided by BNP Paribas Capital (Asia Pacific) Ltd., sponsor and coordinator for the sale.

Citic Pacific's stake in Dah Chong Hong may fall to 56.6 percent following the listing, the statement said. The parent owns all of Dah Chong Hong at present.

Proceeds from the share sale after deducting underwriting fees and related expenses may rise to HK$5 billion if Dah Chong Hong exercises an option to sell additional shares, according to the statement.

Dah Chong Hong, which owns car dealerships in Hong Kong, increased its profit last year to HK$322 million from HK$242 million in 2005, Citic Pacific said.

To contact the reporter on this story: Mark Lee in Hong Kong at wlee37@bloomberg.net

Last Updated: September 14, 2007 12:18 EDT