- Silk Road Fund, Prudential Financial plan to buy shares
- Investment bank seeks funds to expand after market recovery
China International Capital Corp., the first Sino-foreign investment bank, plans to sell about $485 million of stock to cornerstone investors in its Hong Kong initial public offering, people with knowledge of the matter said.
China’s Silk Road Fund plans to buy $100 million of shares, while China Mobile Communications Corp. is investing $50 million, according to the people. U.S.-based Prudential Financial Inc. is purchasing $25 million of stock, while an arm of state-run Xinhua News Agency is committing $30 million, the people said, asking not to be identified as the information is private.
CICC plans to seek as much as $900 million in the Hong Kong IPO and aims to start taking orders from institutional investors next week, the people said. The Beijing-based investment bank is raising money to expand its equity sales and trading, wealth management and international business after China’s stock market surged 15 percent from an August low.
The deal adds to the $25.3 billion raised from first-time share sales in Hong Kong this year, up 42 percent from the same period in 2014, data compiled by Bloomberg show. Cornerstone investors typically agree to hold on to their shares for six months in return for early, guaranteed allocation.
State-owned China General Nuclear Power Corp., Commercial Aircraft Corp. of China and Baosteel Group Corp. each plan to buy $50 million of CICC stock as cornerstone investors, according to the people. Hong Kong-based fund manager Value Partners Group Ltd. and China Chengtong Holdings Group Ltd. are also investing $50 million apiece, while Chinese trainmaker CRRC Corp. will purchase $30 million of shares, the people said.
A Hong Kong-based external spokesman for CICC declined to comment.